Polarization of Asset-Liability Ratio of Steel Enterprises in China

China's reform and opening up and rapid economic growth have created conditions for China's steel industry to achieve leapfrog development. China's steel industry has become the most internationally competitive industry. However, due to market environment, industrial ecology, R&D capacity and other factors, the development quality of most large-scale iron and steel enterprises in China is still far behind that of the world's first-class enterprises. In order to realize the high-quality development of iron and steel enterprises in China, the policy suggestions are as follows: speeding up the reform of state-owned enterprises, further improving the efficiency of enterprises; eliminating obstacles, giving full play to the role of market forces in industry integration, forming a large domestic competition pattern; perfecting the management system of environmental standards, encouraging the green development of iron and steel enterprises; improving the industrial innovation system and enhancing the innovation ability of enterprises. At the same time, enterprises must speed up the reform and development: first, to create an industrial ecosphere, leading industrial development; second, to build business systems. China's iron and steel industry has become the most internationally competitive industry and has a decisive influence in the world. China's crude steel output has exceeded 100 million tons since 1996. It has been ranking first in the world for 22 consecutive years, reaching 930 million tons in 2018 and occupying half of the world's steel industry for a long time. The iron and steel industry supports the development of our national economy, and our iron and steel enterprises are striding forward to the first-class enterprise team in the world.

From the analysis of comprehensive indicators, besides Baowu Group, there are still gaps in the quality of development between other enterprises and Japan's Nippon Iron Sumitomo Kim, South Korea's Puxiang Iron.

Firstly, the production scale of Chinese iron and steel enterprises has reached the level of world-class enterprises. From crude steel output, the production scale of Chinese iron and steel enterprises is comparable to that of Japanese and Korean enterprises. In terms of market share, overseas steel enterprises occupy an absolute oligopoly position in their countries or regions, while Chinese steel enterprises are less than 10%. Secondly, there is a big gap between China's iron and steel enterprises and the world's first-class iron and steel enterprises in terms of scale and quality of operation.

From the point of view of business income, overseas steel enterprises are basically 2-40 times the income scale of China's steel enterprises. In addition to the revenue scale of Baowu Group exceeding 300 billion yuan, other enterprises in China are under 100 billion yuan. The high non-steel business income of overseas steel enterprises is one of the reasons for the large scale of business income.

From the perspective of per ton steel revenue, China's steel enterprises are far below the world's first-class level. The production scale of Baowu Group is about 1.5 times that of POSCO and Nippon Iron Living Gold, but the income per ton of steel is only 50% of POSCO and 70% of Nippon Iron Living Gold. Hegang shares (2.950, -0.02, -0.67%) are comparable to those of POSCO and Nippon Iron Living Gold, but the income per ton of steel is only 1/4 to 1/3 of each other.

In terms of net profit, except Baowu Group, China's steel enterprises are lower than the world's first-class level. From the perspective of net profit and net profit change, Baowu Group and Nippon Steel Limited Jin, POSCO and JFE of Japan are the first camp with high and stable profits; Luxembourg's ArcelorMittal's profits are high but unstable, and the second camp; Angang's shares, Hegang's shares and German ThyssenKrupp's are the third camp with low profits.

From the net interest rate point of view, the average profit margin of Chinese steel enterprises is lower than the world first-class level. In 2017, the net profit margin of Chinese steel enterprises is generally higher than that of overseas steel enterprises, but the average profit margin of Japanese and Korean steel enterprises is 2-5 times that of Chinese steel enterprises (except Baowu Group).

From the aspect of asset-liability ratio, the polarization of steel enterprises in China is serious. Overseas steel enterprises have basically maintained less than 55%, and both state-owned and private enterprises in China have reached the world level, while local state-owned enterprises are far higher than the world level. Thirdly, the labor efficiency of iron and steel enterprises in China is low. From the per capita sales revenue, China's steel enterprises lag far behind the world's steel giants. The labor productivity of overseas steel enterprises is 2-10 times of that of Baowu Group and 2.5-30 times of that of other steel enterprises.

Finally, the investment intensity of R&D and environmental protection of China's iron and steel enterprises is comparable to that of the world's first-class enterprises.

In terms of R&D investment intensity in 2017, except Shougang (3.510, 0.02, 0.57%) and Shagang (8.640, 0.26, 3.10%), China's steel enterprises are higher than the world's steel enterprises. The investment intensity of Baowu Group, Anshan Iron and Steel Co., Ltd. and Hegang Co., Ltd. is equal to that of Nippon Iron and Steel Sumitomo, which is more than four times of that of Puxiang Iron and Ancelotal.

From the perspective of environmental investment funds, China's steel enterprises are comparable to the world's steel giants. The investment of Baowu Group in China is second only to that of Puxiang Iron Making Company, and the investment of other enterprises is comparable to that of Nippon Iron Sumitomo.

From the results of environmental governance, the gap between China's steel enterprises and the world's steel giants is narrowing. Baowu Group is close to the world's leading level in gaseous emission of tons of steel. Most of the indexes of Handan Iron and Steel Group of Hegang have reached the world first-class level. In sintering stage, SO2 emission is close to zero, and NOX is less than 50 mg/m3. However, overall, the level of environmental protection management in steel enterprises in China is not balanced, and the pressure of environmental protection is still great.

Reasons for the large and weak iron and steel enterprises in China

China's reform and opening-up and rapid economic growth have created conditions for the leap-forward development of iron and steel industry. However, due to market environment, industrial ecology, R&D capacity and other factors, the development quality of China's steel enterprises still lags behind that of the world's first-class enterprises. Firstly, the rapid economic growth of reform and opening-up has provided conditions for large-scale modernization of iron and steel enterprises.

China's iron and steel industry is the pioneer of reform and opening up. In the early 1980s, Baosteel introduced Japan's advanced coastal consistent mode of production, thus thoroughly.