Hebei GDP Lowest in 30 Years On Steel Slowdown and Environmental Crackdown

This isn't news, but the media is starting to cover the widespread industrial slowdown in China's northeast coal-steel-oil belt. This article deals with the slowdown in the steel industry pulling down Hebei's GDP. Despite the major steel industry and it's proximity to Beijing, Hebei is one of the poorest provinces in eastern China.

河北省的“最低”：钢铁萎靡 GDP增速30年罕见

Hebei Province late last year launched the "6643 Project", requires to be completed by 2017 to cut 60 million tons of steel production capacity, which impact on local economic growth, seems to have had "immediate" action. Industrial province of Hebei in the first quarter GDP growth of 4.2%, less than half of last year, after ranking on the list. In response, Beijing, Tianjin Development Research Center Wang Shuqiang that the "6643 Project" to promote the true impact of the economic growth rate, but is a direct result of the economic slowdown, to do a detailed analysis of the economic slowdown is not the only reason for pollution prevention.

According to the government work report to deploy this year, the main targets of economic and social development, the GDP growth of around 7.5 percent, the same as last year with the expected target. However, from the "Twelfth Five-Year Plan" binding emission reduction targets for the completion of the situation, three years before the energy consumption per unit of GDP decreased rates of nitrogen oxides and completed only 54% and 20% of the total task, in connection down two years, for some heavy industry province, the energy saving enormous pressure.

How to increase energy conservation work in promoting the process of maintaining rapid economic growth has become a new topic of local government need to overcome. As an industrial province, Hebei province in the first quarter GDP growth of 4.2%, with growth of 9.1% compared to the same period last year, less than the latter half of the GDP growth rate in the country has announced the provinces ranked second to last. GDP growth rate declined, the reason behind it is what, how to treat such a sharp slowdown was widespread concern.

For this reason, the "Daily Economic News" reporter (hereinafter referred to as NBD) Interview with a long-term commitment to research regional economic development of Beijing, Tianjin Development Research Center Wang Shuqiang.

Steel industry malaise is the main cause of slowdown

NBD: Hebei Province, the first quarter GDP growth was 4.2%, while in the first quarter year on year growth rate of 9.1 percent, a sharp slowdown in growth, which is how to interpret?

Wang Shuqiang: 4.2% of this figure somewhat surprisingly, is the lowest for nearly 30 years. Decline is normal? Need to analyze the reasons. Growth in the first quarter of last year of Hebei's three largest industries was 0.5%, 11%, 8.3%. In the first quarter of this year the growth rates were 3.5%, 3.5%, 5.8%, industrial and construction sectors had the fastest decline in GDP growth, from 11% down to 3.5%, the industrial sector accounted for half of the total GDP of Hebei Province, while the steel industry accounts for 25% of industrial output. January to February Hebei Steel [ 3.31% funding research report ] industry cumulative GDP growth of -0.2% in December last year, the value of -5.4%, while the 2013 growth rate was 8.6%, indicating Hebei last 12 Steel has entered atrophy month period. Steel industry malaise is the main cause of the economic slowdown.

NBD: In recent years, the development of the steel industry is actually greatly influenced by the policy as an important part of a comprehensive environmental governance, Hebei late last year launched the "6643 Project", that is to be completed in 2017 60 million tons of steel production capacity, such as reduction of the task atrophy of the steel industry is to promote and implement the project and have a direct relationship?

Wang Shuqiang: Hebei really stepping over the implementation of the "6643 Project", but is a direct result of the economic slowdown, do specific analysis. In January to February this year, steel production was 37.1 million tons, an increase of 2.1% over last year; in 2013 the steel production for Jan-Feb was 36.65 million tons, an increase of 12.9% yoy. Actually reduced steel production growth from the beginning of December last year, steel production in December fell 0.5%, while in December 2012 it grew 18%.

Therefore significantly reduce steel production growth is an important reason Hebei overall economic slowdown. "6643 Project" to promote the true impact of the economic growth. In addition, the steel price decline is also an important reason for the economic slowdown. 1 to February this year, the total profit of the steel industry was -1.7 billion, representing a decrease of 117%, overall losses occur, which are inseparable and sharp decline in steel prices, steel composite price index in the first quarter of this year dropped by about 14%. From this perspective, the economic slowdown is a result of iron and steel production and steel market downturn Yajian joint action.

NBD: Central repeatedly raised the GDP growth rate to preserve jobs, improve people's livelihood, increase the income of urban and rural areas, and to determine the reasonable growth of about 7.5%, if the growth rate was 4.2% in Hebei beneath the reasonable range?

Wang Shuqiang: To compare the figures, indeed a breakthrough, but 7.5 percent is the annual value of 4.2% quarterly values ​​are not comparable, to determine whether a breakthrough, need to look after three quarters.

Emission reduction policies should promote relaxation

NBD: Taking into account the continued low growth would endanger "to promote employment and people's livelihood", the local government should temporarily reduce the "6643 Project" enforcement?

Wang Shuqiang: should not relax. Xingtai in Hebei Province, Shijiazhuang, Hengshui, Baoding and other cities in the Ministry of Environmental Protection has announced the top ten cities in the forefront of poor air quality, environmental management is a top priority.

In addition, pollution prevention policy is not the only reason for the economic slowdown, employment pressure, there are other ways to ease. According to just above analysis, in addition to the direct cause of the economic slowdown Yajian steel production capacity, there is the general downturn in the market. Whether it is a new long-term strategy of urbanization or urban underground pipe network construction as short-term stimulus policies shantytowns and the western railway construction, the recent increase in steel demand will raise steel prices, steel market activation. But policy implementation have lag.

To some extent, the economic slowdown is the economic transformation "signs." In the steel industry, while shrinking, including automobile manufacturing growth, high-end equipment manufacturing industry gradually accelerated, became the new force driving economic growth, greatly reducing the dependency syndrome in Hebei's steel economy.


In addition, a quarter of the Hebei second industrial growth dropped significantly, while the tertiary industry dropped to 5.8%, the rate of decline is much lower than the second industry. The service industry is the main force of labor absorption, stability and growth of the tertiary sector will ease the employment pressure in the second industry.

NBD: Some experts believe that the economic slowdown is a transition pains, pains in Hebei you think will last?

Wang Shuqiang: pain is a more pessimistic view, I believe that the economic slowdown is a good opportunity for economic transformation. For future development, should establish and implement a scientific and rational screening criteria were limited production enterprises, good negotiation and communication work with relevant stakeholders to achieve technology and enterprise survival of the fittest; establish and improve emissions trading and carbon trading mechanism, a corporate consciously pollution, long-term environmental monitoring of the government's macro-control mechanism; accelerate decentralization, stimulate private enterprise investment enthusiasm, stimulate entrepreneurship and innovation passionate community.