Effectiveness and Policy Analysis of International Capacity Cooperation of China’s Steel Industry

With the transition from a growth-centered economy to a quality-centered one, China’s steel industry faces a variety of difficult tasks, including eliminating overcapacity, accelerating technological progress and innovation, and enhancing overall competitiveness. To accomplish the task of de-capacity (i.e., the removal of excess capacity), various levels of government in China have introduced a set of policies for controlling the industry’s development. The steel industry has seen progress in its de-capacity efforts: A large amount of excess capacity has been removed, firm performance is improving, and the industry is being forced to undergo transformation and upgrading. The steel industry, however, still faces serious overcapacities. International capacity cooperation is a major approach to de-capacity. China’s steel industry must conduct business in a way that considers the global market and strengthen international cooperation. The industry should focus on improving innovation capacity and use this focus as the driving force for healthy, sustainable development. In summary, in the current situation, firms should adjust production based on demand and supply, and government must ensure the development of good policies regarding capacity adjustments. Only when all parties work together can the industry realize high-quality development.