China restricts foreign investment in steel industry
Qi Xiangdong, Deputy Secretary General of China Iron and Steel Association (CISA) announced that China would ban the dominance of foreign investment in its steel industry. The new steel industry policy barring foreign companies from taking controlling stakes in domestic steel companies will be published next week. According to Qi Xiangdong, the necessity for the policy arose as many major companies started to accelerate their efforts on mergers and acquisitions in China's steel industry. The two of these big-scale mergers include Mittal Steel's 36.67 percent stake takeover from Hunan province based Valin Iron and Steel, and Arcelor's seeking a controlling stake in Shandong Province based Laiwu Iron and Steel. According to the new policy, foreign investors should obligatorily have independent intellectual property in steel-making technologies and have an annual output of 10 million tons in order to invest in China's steel industry. China's central government hopes to see mergers among the domestic steelmakers instead of the ones with foreign steelmakers. An example is expected with the merger of Liaoning province based Anshan Iron and Steel and Benxi Iron and Steel.