At 11th International Steel Market and Trade Conference held on Mar 28-30 in Guangzhou, China, during her speech on China’s macroeconomy and real estate industry, Ren Xingzhou, the director of Institute of Market Economy, Development Research Center of the State Council, stated that China’s economy showed an overall downtrend in 2012 due to sluggish foreign demand, declining investment growth and readjustment of domestic economy.
In 2012, China’s exports increased by 7.9 percent year on year, while the annual growth was 20.3 percent in 2011 and 31.3 percent in 2010. Moreover, in 2012, China’s foreign trade expanded 6.2 percent year on year, on the back of 7.8 percent annual growth in the country’s GDP. Meanwhile, China’s net steel exports amounted to 44.48 million mt, up 27.6 percent year on year, accounting for 6.2 percent of total crude steel output in 2012. Ren Xingzhou indicated that a large increase in steel exports is not an easy target to reach given the overall sluggish demand.
As for 2013, Xingzhou underlined that for the first time in 18 years, Chinese central government is seeking improvement in stability instead of setting a target for rapid development. According to Xingzhou, macroeconomic indicators suggest that the steel industry might see a better environment in 2013 compared to the previous year, as she estimates that in the current year, fixed asset investments and export growth could reach 20 percent and 10 percent year on year respectively.
However, she stressed that China’s inflation is another vital issue for economic development and steel industry, because if inflation grows too fast, central government will take measures to curb rapid growing prices, including tightening credit, which might exert heavy pressure on steel enterprises and traders.