NDRC Issues Steel Industry Development Policy

The National Development and Reform Commission (NDRC) released the text of the Steel Industry Development Policy on July 20. The State Council approved the policy in April 2005, but had not previously released the text. Once called the "State Planning Commission," the NDRC has issued previous industry development policies, including the 2004 Auto Industry Development Policy.

The steel policy seeks to increase the domestic steel industry's capacity to compete globally. To accomplish this goal, the policy encourages domestic enterprises to "use domestic facilities and technology" while importing only "equipment and technology that cannot be made domestically or for which domestic supply is unable to satisfy the requirements." The policy prohibits foreign control over domestic steel enterprises and restricts foreign investment in the steel industry. Foreign companies wishing to invest in the domestic steel industry must have produced either 10 million tons of steel or 1 million tons of high-alloy specialty steel during the previous year. If the foreign company can fulfill these requirements it may invest in existing Chinese steel facilities, but may not create new ones.