National Development and Reform Commission, Steel Industry Development Policy

Promulgated: July 8 2005

Main contents: According to the Policy, mergers and restructurings shall be implemented in order to expand the scale of pillar enterprise groups with a comparative advantage. Output of China's top 10 steel enterprises shall account for 50% or more of the country's total steel production by 2010; and the percentage shall increase to 70% or more by 2020 (Article 3). A foreign steel enterprise investing in China's steel industry shall have proprietary intellectual property rights and technology, with at least 10 million tonnes of generic steel output or at least 1 million tonnes of special high alloy steel output in the preceding year. A foreign non-steel enterprise investing in China's steel industry shall have strong capital strength and relatively high credibility, and it shall provide proof of its capital verification and business results issued by a bank and an accounting firm. Foreign enterprises investing in China's steel industry shall integrate with the reform and relocation of existing steel enterprises, and no new sites will be set. In principle, foreign investors investing in China's steel industry are not permitted to hold a controlling interest (Article 23).