China's steel industry expands

China's economy is red hot, and there is some fear that the economy is overheating. Yeterday wa reported that a GDP growth rate of 9% is very likely for the first half of 2004.

The country sucks in foreign direct investment (FDI) in record rates, and commodity prices all across the globe are rising, just to feed China's hunger - China consumes 30% of global steel consumption. Which is new, considering that they experienced price declines over the last couple of years and were seen as "boring" amongst investors or those looking for jobs.

Now, Chinese steel makers start expanding abroad. Companies, such as Laiwu Steel Group, or Baosteel look overseas for opportunity, into countries such as Brazil, Australia, South America or the US.

Of course they do this to be able to continue feeding their thirst at home. Isn't this called securing the supply lines? And, wait a minute - aren't we scared that they "conquer the world"? No -we are not. They now create workplaces in other countries - the AWSJ reported that un the US, a shuttered Minnesota mine was reopened late 2003 under a new ownership agreement between Chinese steelmaker Laiwu Steel Group and Cleveland-Cliffs to buy EVTAC Mining, which earlier, had filed for bankruptcy and in the process, laid of 400 workers.

This again shows that globalisation creates opportunities, all across the globe, in a variety of locations. And we believe it is great!

(By Asia Business Consulting)