After a decade of rapid growth since 2000, China’s steel industry is undergoing a slow growth. This year, crude steel output is expected to be lower than 700 million metric tons.China's calculated policy of overstimulating the real estate and construction industries, is largely responsible for driving up global iron ore prices. And now, high global iron ore prices are said to be partially responsible for slowing China's iron production. Ironic? You be the judge.
Three factors are believed to influence the production of steelworks in 2012. First, the global economic situation will not regain much of its composure in the first half of this year, thus, production for many new projects is not expected to commence in the short term. Second, the government does not encourage steel exports, so policies are likely to be introduced to reduce export tax rebate. And third, iron ore prices remain high, resulting in greater production costs compared to sales prices.
Related Data: Monthly Production of Crude Steel, Annual Production of Crude Steel, Average Daily Production of Crude Steel, FAI of Real Estate, FAI of Transportation Equipment _PragCap
Michael Pettis is back on the internet, with more insider views of China's economic doldrums:
What is especially interesting, at least to me, is that an increasing number of commentators within China are identifying the social and economic rigidities imposed by the state system as crucially important in constraining China’s future economic and political growth.
This is becoming a pretty contentious debate. Over the past several months, in fact, we have seen a noticeable surge in articles and reports like this one – often by very prominent academics and policy advisors – criticizing the power of special interests in China. Their main concern seems to be over the constraints these special interests impose on further Chinese development, with the entrenched interests that have benefitted over the last decade or two having become so powerful that they are making it increasingly difficult for China to adjust.
A lot of very smart people in China, in other words, seem to be worried that the country’s governance structure and its development model are no longer able to accommodate the needs of the economy and that it is vitally important to confront the entrenched interest that make change difficult. _ChinaFinancialMarkets
The corruption within China's government and government-connected economy benefits a large number of insiders. But thanks to China's one-child policy, the elite class in China is composed of disconnected interests, rather than tightly knit extended family groupings. In other words, when things start to schism at the top, there is little to hold them together.