Going Out: Power Steel Wants to Sing Strategic Role

During the two sessions of the National Committee, Foreign Minister Wang Yi stated at the press conference that the key word for China’s diplomacy this year is “one key point and two main lines”, and one key point is “One Belt and One Road”. Many ministers are also concerned about the "Belt and Road" issue at the two sessions.

It is understood that at present, in the overseas orders, the high-speed rail industry chain, machinery and equipment industry play a leading role. The Securities Times reporter learned that in the “Belt and Road” plan, the energy industry also occupies an important position. In some countries and regions, its importance even exceeds that of high-speed rail and machinery equipment.

CPPCC member Fan Jixiang once served as the chairman of China Power Construction Group Co. In his opinion, the electric power industry should act as the "One Belt and One Road" strategy. “Electricity is more suitable for going out than railways and high-speed rails because electricity is a necessity, and a country’s economy needs a high demand for high-speed rails when it develops to a certain stage.” He said, “To do projects abroad, to meet the needs of local economic development, In some countries, the current level of development may be equivalent to our level of 20 years ago. Some areas are surplus on our side but they are high-end on the other side. Some countries have abundant resources, but there are not enough industrial facilities, and there is insufficient supply of electricity. Countries, often cement plants, glass factories, aluminum processing plants are not enough production capacity, we have to plan the overall out."

Last year, Fan Jixiang and Pakistan’s relevant authorities negotiated cooperation on two thermal power investment projects in Pakistan as well as roads, power transmission and transformation, water conservancy and hydropower. As the world's largest integrated enterprise of hydropower survey, design, construction and operation, China Power Construction Corporation has undertaken dozens of hydropower projects in Pakistan, and is not limited to the power sector. The Group also uses the advantages of large-scale civil engineering to participate in the Pakistani roads and tracks. Traffic market.

China Power Construction Corporation is a new force for China's overseas expansion. In January of this year, a power plant in India, which was under construction by a group of companies, began operation. This is one of the more than 500 construction projects the group is currently implementing in the “Belt and Road” region. It is reported that as of the end of 2014, in countries and regions in the “Belt and Road” key regions, China Power Construction Corporation undertook project contracting and investment operations in 21 countries and regions, with 571 projects under construction. In the high-end market, last year, China Electric Construction Corporation's companies beat 14 European, American, Japanese and Korean companies that are monopolized in the Middle East market, and signed with the world's largest oil and gas producer Saudi Aramco, the world's largest LPG power plant - Jizan 385 The 10,000-kilowatt gas turbine combined cycle power plant project is related to the contract. This is the first time China's power plant equipment has successfully entered the Saudi market. "Our industry must find its own position in the world to go out, and is to go out of the upper level of the industry." Fan Jixiang told reporters that some low-level industries can not compete with other countries' opponents.

Fan Jixiang said: “There are two lines for overseas deployment. First, in countries and regions associated with the 'One Belt and One Road,' projects that have long-term needs but lack the benefits of the current period should be led by the government; second, they can produce current economic benefits and should be fully marketed. Many of the countries in the Belt and Road Initiative are short of electricity and the power grid is incomplete. When China's power industry goes abroad, it is necessary for the country to set up production capacity and integrate the entire power industry. Our industry advantages".

Recent energy issues continue to heat up. Liu Zhengya, member of the National Committee of the Chinese People's Political Consultative Conference and chairman of the State Grid Corporation of China, also pointed out that China’s resources are in short supply and energy and environmental issues are increasingly prominent. While neighboring countries are rich in energy resources, we should focus on the “Belt and Road” countries and promote the application of UHV technology overseas.

Steel seeks to "relocate" surplus capacity

As one of the traditional industries with the most overcapacity in domestic production, steel leading companies are also actively taking actions under the “Belt and Road” strategy. Deng Qilin, deputy to the National People's Congress and chairman of Wuhan Iron and Steel Group, said that the "One Belt and One Road" strategy has provided an important opportunity for the development of the steel industry. Wuhan Iron and Steel has already prepared for "going out".

Deng Qilin analyzed that for China, steel products are surplus production capacity, but for some countries, market demand is not small, and ASEAN, Africa, and Latin America have huge market potential, along the “Belt and Road” line 64 Among the countries, net importers of steel account for more than 70%. "As far as I know, the expected profit of the market is still considerable, so we have 'relocated' surplus fuel production equipment in the past. We can do something on the 'Belt and Road' and can also find a very good excess capacity for steel. Way out." Deng Qilin said.

As a mature traditional industry, iron and steel is also very competitive overseas. Can China's steel companies “go abroad” to meet international challenges? Deng Shilin said that this is a gradual process. WISCO has made some preparations and is ready to explore and try next.

It is understood that in the past, China was exporting low-end products with low profits. Going out of the equipment means that the production line and industry are going out. The profit rate is generally 20% to 40%; domestic high-end surplus products have to go out and it is too bad to eliminate them. . Chinese companies will face overseas competition if they go abroad, but only through this approach can they force companies to improve their competitiveness.