Made in China 2025 puzzles the development of the steel industry


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"Standing on the 'Internet+' trend and taking advantage of the trend will make China's economy soar." On March 15, Premier Li Keqiang mentioned the hot word "Internet+" again when answering reporters' questions after the closing of the National People's Congress. The "+" in the so-called "Internet +" refers to traditional industries including manufacturing. Behind this buzzword is the new dimension that Premier Li Keqiang gave to Made in China 2025: intelligent transformation, and the new ideas and new space it brings to the steel industry. This is the biggest advantage of this two sessions. A strong manufacturing industry leads to a strong economy. Through the efforts of recent years, the adjustment of my country's industrial structure has been

"Standing on the cusp of 'Internet +' and following the trend will make China's economy fly." On March 3, Premier Li Keqiang once again mentioned the hot word "Internet +" in response to a reporter's question after the closing of the National People's Congress. The "+" in the so-called "Internet +" refers to traditional industries including manufacturing. Behind this hot word, Premier Li Keqiang has given China Manufacturing 15 a new dimension: intelligent transformation, and the new ideas and new space it brings to the steel industry. This is the biggest benefit of the two sessions.

A strong manufacturing industry is a strong economy

Through the efforts of recent years, China's industrial structure adjustment has achieved certain results, especially the growth rate and proportion of the tertiary industry have exceeded the secondary industry. Since 2013, the proportion of China's tertiary industry GDP has exceeded that of the secondary industry for the first time. In 2014, the GDP growth rate of the tertiary industry was as high as 8.1%, 0.8 percentage points higher than that of the secondary industry; The proportion reached 48.2%, 5.6 percentage points higher than that of the secondary industry. At the same time, the contribution rate of final consumption expenditure to GDP growth was 51.2%, which was 2.7 percentage points higher than the contribution rate of investment to GDP growth. These two major structural changes illustrate the increasing quality of economic growth.

However, the progress of the overall economic restructuring can hardly hide the huge challenges currently facing the manufacturing industry. "The old normal path and the simple and extensive development path are difficult to sustain. In economic development, we must adhere to innovation-driven development and persist in changing the mode and adjusting the structure. During the two sessions, General Secretary Xi Jinping said this when participating in the review of the Shanghai delegation.

From a macro perspective, the contribution rate of the secondary industry to GDP in 2014 decreased by 4.7 percentage points year-on-year, while the primary industry and the tertiary industry both grew; Industrial added value increased by 7% year-on-year, and the growth rate decreased by 0.6 percentage points; The fixed asset investment in the secondary industry was 14.7 percentage points lower than that in the tertiary industry; The PPI (Producer Price Index) continued to decline by 1.9% year-on-year. From the micro level, the price of commodities, including steel, has fallen sharply, the growth rate of fixed asset investment in most manufacturing industries has fallen sharply, while fixed asset investment in industries with serious overcapacity such as steel has declined, bank loans and social financing are gradually withdrawing from the manufacturing industry, and most enterprises are facing huge operational challenges.

Premier Li Keqiang proposed to maintain the balance between "stable growth" and "structural adjustment", but it is the manufacturing industry that needs to find this balance. In this regard, the government work report clearly expounded, that is, two "medium and high", maintaining medium-high speed growth and moving towards the "dual goal" of medium and high-end level.

From this point of view, the real economy dominated by manufacturing has become the key area of China's economic "stable growth" and "structural adjustment", and the real economy is strong and the growth is stable, and the real economy is strong and the structure is excellent. In 2015 and even in the next decade, the focus of China's economic restructuring should shift from structural adjustment between industries to structural adjustment of various industries, including manufacturing.

As Li Yizhong, a member of the National Committee of the Chinese People's Political Consultative Conference, said, the proposal of Made in China 2025 is a great encouragement to the industrial field. The industrial field should play a supporting role in coordinating and promoting the "four comprehensive" strategic layout.

The steel industry needs to transform intelligently

In the discussion of Made in China 2025, the new concept of "intelligent transformation" uses the concept of "Internet +" to reveal the repositioning of the manufacturing industry by the new normal of the economy more advanced.

As Gan Yong, a member of the National Committee of the Chinese People's Political Consultative Conference, said, China's steel industry has encountered a good opportunity. The 'Internet + Steel' model will change the entire steel economy, and may even include the entire process manufacturing industry.

For many years, the process of transforming traditional industries with new technologies, marked by the integration of industrialization and industrialization, has been going on. As a traditional process manufacturing industry, the integration level of industrialization and industrialization in the steel industry has been in the forefront of the industrial industry in the past, and the technological innovation and the docking and integration of traditional process manufacturing industry with production automation as the main direction are relatively smooth. However, with the development of information technology entering the Internet era, the emergence of emerging technologies such as cloud computing, big data, and the Internet of Things is making the concept of intelligent transformation break through the framework of the integration of industrialization and industrialization in the past.

The Ministry of Industry and Information Technology released the "Raw Material Industry Deep Integration Promotion Plan (2015~2018)" at the beginning of the year, which clearly pointed out that at present, developed countries have launched the "re-industrialization" strategy, which is reshaping the new competitive advantages of the manufacturing industry. With the rapid development of a new generation of information technology, networking, digitalization and intelligence have become the key to seizing the commanding heights of industrial development. Accelerate the promotion of the deep integration of raw material industry and industrialization machine must not be lost, we must make great efforts and unremitting efforts to grasp it.

Miao Wei, Minister of Industry and Information Technology, described an intuitive scene of German Industry 4.0: Industry 3.0 is the digitalization and intelligence of machinery and equipment, and the picture depicts a robot grabbing a cargo from a shelf and loading it into a truck; Industry 4.0 still uses this diagram, but draws a small arc on the shelves, robots, and cars, indicating that all three are connected through a ubiquitous network. This is the concept of the Industrial Internet.

Therefore, the connotation of intelligent transformation is by no means only including information management methods such as production automation and ERP (enterprise resource planning), but more importantly, it must reflect the subversive and revolutionary changes brought by the industrial Internet to the operation mode of traditional industries.

First of all, this change is reflected in the platform-based competition that is closely integrated through the industrial Internet. That is, under the industrial Internet, the use of cloud computing, big data composed of an overall network manufacturing technology economic service platform. Committee member Gan Yong's vision of this platform is to put steel enterprises, suppliers, users, financial institutions, technical service institutions, design institutions, trade institutions, logistics and distribution institutions, etc., all on a large platform to jointly operate and share the results. This platform economy requires the sharing of data, information, resources, and even the integration of capital.

Second, this change is reflected in the simultaneous industrial coupling in this process. In the process of platformization, industry coupling will inevitably occur on and outside the industrial chain. In the context of this platform economy, the lines between industries will become blurred. The efficiency of capital, resources and talents from different industries to complete the new extension of the original industry after integration will be much higher than doing it alone.

Miao Wei pointed out that intelligent transformation will become the only way for the traditional manufacturing industry to move towards modernization. Objectively speaking, although the integration of industrialization and industrialization in the steel industry has achieved certain results, it is still in a relatively early stage in intelligent manufacturing, and we are still far from the establishment of the industrial Internet. In the context of major economies in the world are promoting a new round of industrial transformation, powerful leading enterprises must develop in this direction, thereby driving the intelligent transformation of the entire industry.

Innovation and environmental protection must continue to accumulate

Innovation drive and green development are two other dimensions of Made in China 2025. Since the <>th National Congress clearly put forward the innovation-driven development strategy, this term has been repeatedly mentioned in the past two years. The content related to energy conservation, emission reduction and environmental protection related to "green development" has also been deeply rooted in the hearts of the people. For these two dimensions, what is more important is not new concepts and new concepts, but continuous and solid accumulation.

In terms of innovation-driven, the concerns of the deputies and committee members are mainly manifested in several aspects, one is the problem of talent support, how to attract talents into this industry, how to cultivate the talents needed by this industry? The second is the transformation of achievements in the process of combining production, education and research, how to make the results of more joint R&D platforms apply in enterprises? Third, the uncertainty caused by the high risk of scientific and technological investment, how to view and solve the problems of unclear R&D results and even innovation failure? Fourth, the institutional mechanism of innovation subjects, how to stimulate the innovation vitality of scientific researchers through institutional reform?

In the current transformation process, most steel companies have deeply experienced the driving role of innovation. Therefore, most of these problems have been agreed upon or are being practiced in the industry, but innovation is an area that needs to be "achieved naturally", and we need a long period of time to let the existing input and work precipitate and gradually transform into results.

In terms of green development, it is a process that is easier said than done. With the implementation of the new environmental protection law and the publication of a batch of cases, a high degree of consensus has been formed at the level of awareness of environmental protection. At the same time, with the gradual enrichment of a series of monitoring methods such as 24-hour online monitoring, on-site monitoring, drone monitoring, mass reporting, and social organization supervision, the intensity of environmental protection law enforcement is also gradually strengthening. This made the change felt by both delegates and commissioners from the steel industry. In this field, the two major problems of low-cost environmental protection technology research and development and application and unified law enforcement standards need to be solved urgently, which restrict the transformation of environmental protection work from knowledge to action at the governance and supervision ends, respectively.

However, as Gan Yong said, now that controlling smog is the number one task, the state is very determined to strictly enforce the law, but the construction of the entire system still has to go through a process. We believe that with the cases of enterprises such as Hebei Iron and Steel Group Tanggang, the process of environmental protection from knowledge to action will be completed in the next two years.

Finding a new solution to the funding problem for PPP

Whether it is the immediate technological transformation, environmental protection investment, mergers and acquisitions, or a little farther away intelligent transformation and industrial coupling, all of them do not need a lot of capital as support. However, from the actual situation in the past two years, the difficulty of loans and high financing costs of steel companies have intensified year by year, making enterprises feel like they have been "drawn from the bottom". At this year's two sessions, many representatives and members from the steel industry submitted relevant proposals, proposals and suggestions on the financing of the real economy.

The "promotion of public-private partnership model" (PPP), which was clearly proposed in this year's government work report, may become a viable solution.

In fact, as early as December 2014, 12, the National Development and Reform Commission officially issued the "Guiding Opinions on Public-Private Cooperation" to the public, combining the power of the market and the government to hand over the resources that can be mobilized to the institutions that can best exert their efficiency. Although the scope of promotion of this model is established in the fields of infrastructure and public utilities in the report, it should be noted that this model also has great potential in promoting industrial restructuring. Since about half of China's steel enterprises are state-owned enterprises at all levels, the change of their investment and financing models is closely related to local governments, and the implementation of the PPP model through the purchase of services and equity cooperation is conducive to guiding the integration of financial capital and industrial capital.

First of all, there is huge room for development in the fields of energy conservation and environmental protection services. In January, the General Office of the State Council issued the Opinions on Implementing Third-Party Governance of Environmental Pollution, which strongly promoted third-party governance of environmental pollution. In the face of stricter environmental protection laws, steel companies have become an inevitable trend to increase environmental protection investment, and limited funds must be applied more efficiently to energy-saving and environmental protection technologies and equipment with more obvious effects, and third-party governance has found a feasible way out for this demand. At present, there are already external professional service enterprises of steel enterprises as environmental protection "housekeepers", relying on the latter's technology accumulation in professional fields such as desulfurization to solve pollution problems at relatively low costs.

Second, a similar model can also be explored in the field of mergers and acquisitions. At present, the problem of mergers and acquisitions of steel enterprises is that small mergers and acquisitions are difficult to change the pattern of the industry, while disruptive restructuring is difficult to appear due to the large scale of assets and funds involved. Some industry experts suggest that in the merger and reorganization of a large number of steel enterprises involving state-owned assets, investment and financing methods similar to the PPP model can be explored, and the combination of government and private capital can be combined with the government's promotion role and the scale of social capital to promote mergers and acquisitions. Through government participation, attracting social capital to enter, and promoting the resolution of excess capacity through mergers and reorganizations, its strength and effect will be more obvious.

"Only reformers advance, innovators are strong, and reformers and innovators win." As General Secretary Xi Jinping said, life will leave more opportunities to people who are brave and good at reform and innovation. According to Miao Wei, China will use about three decades to complete the transformation from a manufacturing country to a manufacturing power. Made in China 3 is the first step in this three-step process. In this step, the steel industry should have its own thinking, in the process of intelligent transformation, steel can not be absent.

(Excerpt from China Metallurgical News)

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