NEWS

Xi Chairman apec CEO Summit keynote speech began, for the first time elaborated on the new Chinese economy the norm, a new definition of normal, new normal influence. He proposed Chinese economy showing new normal there are four main characteristics: First, to switch from rapid growth in high growth; the second is economic structural optimization and upgrading; the tertiary industry has gradually become the main consumer demand, gradually narrow the gap between urban and regional residents revenue increased proportion of the fruits of development benefit the wider population.

Fourth, the factor-driven, investment-driven to innovation-driven. He said the new normal will also bring new opportunities to China. First, under the new normal, although China’s economic growth slowed down, the actual incremental still considerable; the second, under the new normal, China’s economic growth become more stable, more diversified growth momentum; in the third, the new normal, the Chinese economy structural optimization and upgrading, development prospects of more stable; fourth, under the new normal, the Chinese government vigorously decentralization, market dynamics further release.

Faced with the new economic normality, we can go where steel companies since. One side is the high yield, while the weak market demand, this year, steel oversupply contradiction further highlighted. In 2014 the steel industry diversified industrial development conference held on November 1, the participants reached a consensus, multi-industry development is the inevitable choice to promote the transformation of iron and steel enterprises.

Statistics show that in the first nine months, the communist country’s 618 million tons of crude steel, an increase of 2.34%, while the decline in social demand, crude steel apparent consumption was about 560 million tons over the same period, down 0.9%. In the fall in iron ore prices, steel industry overall efficiency has improved compared with last year: in August before the national key steel enterprises realized profits of 16.193 billion yuan, the average sales profit was only 0.67%, the overall profit margin of 0.34% over last year improve slightly. However, a little analysis can be found, 16.193 billion yuan in profits, including investment income 9.605 billion yuan, 5.982 billion yuan of net operating income, net of these non-core business revenues, the main steel business actual profit was only 606 million yuan, accounting for only 3.7%. "Description Steel main business situation has not been fundamentally improved, the main business profit is very meager, market volatility will be a little small engulf." Metallurgical Industry Planning Research Institute Li Chong said.

In China Iron and Steel Association Vice Chairman and General Zhang Changfu opinion, the steel industry to get out of trouble now only one way: to speed up structural adjustment and restructuring and upgrading. He said scientific planning the layout of multi-industry development will drive future restructuring iron and steel enterprises, to upgrade the inevitable choice, steel companies around the main business, the development of non-steel industries, diversification, is not a local problem, tactical problems, but global issues related to sustainable development, strategic issues. Li Chong also believes that diversification is an important measure under the iron and steel enterprises are facing unprecedented pressure, stability and survival of the "non-steel industry is an important part of enterprise development strategies, rather than expediency, new diversified development of the steel industry is the inevitable choice under the normal. "

Experience of developed countries shows that since the new century, the steel market oversupply situation is worsening, iron and steel enterprises in developed countries is difficult to rely solely on clinging to the iron and steel industry enterprises to maintain long-term stable profit growth, countries from the large steel companies have begun to take the strategic diversification path. In fact, some of China’s major iron and steel enterprises have to accomplish something in the diversified development. According to the deputy chairman of the China Iron and Steel Industry Association, Zhang Xiaofang, at present, multi-industry revenues or profits Shougang, Wuhan Iron and Steel and other steel companies have been part of 50% of total revenue or profits, Baosteel diversified industry revenue reached nearly a thousand billion, in addition , TISCO, Hualing, Benxi Iron and steel, Maanshan Iron and steel and other large steel enterprises in 2013 multi-industry revenue growth of 3-5 times more than in 2002.

However, in practice there are some companies did not bring diversification benefits, but lead to disastrous consequences, how to avoid the errors into the diversified development strategy, but also the iron and steel enterprises must take seriously the issue. Li Chong cautioned that choose not to get involved in industry diversification strategy better, but to choose the right level of diversification, diversification can improve the productivity of capital, and excessive diversification but will significantly reduce productivity.