[Asian Steel Watch] Vol.3 (2017.6) Featured Articles Chinese Steel Moves along the One Belt, One Road After President Xi unveiled the concept of a“New Silk Road”in September, the Chinese government began to actualize the“New Silk Road”and announced One Belt, One Road (OBOR) in March 2015. China has contributed USD 40 billion to a Silk Road Fund to finance OBOR and established the Asian Infrastructure Investment Bank (AIIB). China also held a major OBOR summit in May 2017. The Chinese steel industry has begun to search for a way forward through OBOR for the following reasons: falling steel consumption; prolonged oversupply with declining steel prices; and the spike in financial, environmental, and labor costs. The OBOR project is positive in that it boosts steel demand and address overcapacity; however, it needs adjustment and balance to prevent any dispute and side effect.

1. 78 Asian Steel Watch
Soon after Xi Jinping was sworn in as General
Secretary of the Communist Party of China in
November 2012, he unveiled the vision known
as the “Chinese Dream.” Xi’s Chinese Dream is
characterized by achieving the so-called “Two
100s”: China becoming a moderately well-off so-
ciety with per capita GDP of over USD 10,000 by
2021, the 100th anniversary of the founding of
the Chinese Communist Party, and China becom-
ing a fully developed country by about 2049, the
100th anniversary of the founding of the People’s
Republic of China.
In order to realize this dream, various policies
are being implemented, including the “One Belt,
One Road (OBOR)” initiative, a three-stage plan
to sophisticate China’s industrial structure (Made
in China 2025 Manufacturing giant 2035
Innovation power 2049), and the “Internet Plus”
action plan. OBOR is designed to provide a cat-
alyst for the “reform and opening-up 2.0” being
driven by President Xi.
The “reform and opening-up 1.0” period took
place over the last 30 years. Beginning with four
small special economic zones (SEZ) in southern
China in the late 1970s, then-President Deng Xia-
oping eventually opened 14 coastal cities and the
entire Pearl River Delta to foreign investment in
the 1980s. Deng formulated a three-stage devel-
opment plan which aimed to open a part of China
to all of China (dot line plane). The next Pres-
ident, Jiang Zemin, followed in the footsteps of
his predecessor by developing the Yangtze River
Delta in the 1990s. In the 2000s, President Hu
Jintao implemented the Grand Western Devel-
opment Program, the Northeast Revitalization
Plan, and the Rise of Central China Plan. As these
examples show, China’s reform and opening has
expanded from south to north, and from the
Eastern China to the Western Central China re-
gion.
Unlike his predecessors, who focused on do-
mestic development, President Xi is attempting
to connect the developed eastern coastal regions
and the less-developed central western regions to
the outside world by both land and sea. In doing
so, he is seeking to address regional imbalances,
Chinese Steel Moves
along the One Belt, One Road
Dr. Chang-do Kim
Senior Principal Researcher
POSCO Research Institute
jincd@posri.re.kr
Featured Articles

2. Vol.03 June 2017 79
ease overcapacity, and encourage local companies
to expand overseas. While Deng’s reform and
opening-up policies fueled domestic development
introducing advanced foreign technology and
experience, Xi’s OBOR seeks to apply China’s ac-
cumulated know-how in rapid growth to pioneer
overseas markets and expand its clout within the
global community. During this process, China’s
reform and opening policies have been upgraded
in terms of quality.
When President Xi un-
veiled the concept of a
“New Silk Road” during
a visit to Central and
Southeast Asia in Sep-
tember and October
2013, it was generally
accepted as more of a dream than a vision. There
seemed to be a low likelihood of connecting Asia,
Africa, and Europe along the former Silk Road
through an economic belt.
However, Chinese leaders have since pursued
internal measures to create new policies to realize
OBOR, and externally they took advantage of
summit meetings to persuade leaders in other
countries to participate in the initiative. Thank
to such efforts, the Chinese government began
to actualize this “New Silk Road” and announced
OBOR in March 2015. “One Belt” refers to the
land-based “Silk Road Economic Belt” and “One
Road” describes an oceangoing 21st century
“Maritime Silk Road.” The initiative aims to rein-
vigorate the overland Silk Road first established
during the Han Dynasty (BC 206-220) and the
maritime Silk Road that emerged during the
Ming Dynasty (1368-1644) with a view to con-
solidating the development demand in Eurasian
countries and establishing collaborative net-
works.
The OBOR initiative as envisioned by the
Chinese government directly or indirectly con-
nects 65 countries with a combined population
of 4.4 billion people. This accounts for 63% of the
world’s population, and their total economic out-
put of about USD 21 trillion represents roughly
OBOR, the key of
“Reform and
Opening-up 2.0”
for realizing
the “Chinese Dream”
Chinese Steel Moves along the One Belt, One Road
Source: Compiled from the Chinese government and media reports
One Road:
21st Century Maritime Silk Road
One Belt:
New Silk Road Economic Belt
Netherlands
Russia
Turkey
IranGreece
Kenya
Sri Lank
India
Indonesia
Uzbekistan
Kazakhstan
Reform and Opening 2.0
The concept of “New Silk Road”
unveiled by President Xi
(September-October 2013)
Contributing to the
Silk Road Fund
(USD 40 billion, December 2014)
The vision of OBOR released by
the Chinese government
(March 2015)
Figure 1. National Development Policies in China and Vision of OBOR Economic Zone
Northeast
Revitalization Plan
(2003)
Development of Beijing,
Tianjin and Bohai Bay (2000s)
Development of
Yangtze River Delta
(1990s)
Development of the Pearl
River Delta (1980s)
Grand Western
Development
Program (2001)
Rise of Central
China Plan (2006)

3. 80 Asian Steel Watch
29% of the total global economy. To allow the
economic linkage of this vast area, China has set
five major goals for OBOR: policy coordination,
facility connectivity, unimpeded trade, financial
integration, and people-to-people bonds. These
goals aim to reduce trade and investment barriers
through the development and connection of in-
frastructure in neighboring OBOR countries.
China has contributed USD 40 billion to a
Silk Road Fund to finance OBOR and established
the Asian Infrastructure Investment Bank (AIIB)
with an initial USD 100 billion in capital. The
AIIB welcomed 57 founding members in March
2015, and at the first annual meeting in June
2016 approved USD 509 million in investment in
its first four projects, including highway construc-
tion in Pakistan and Tajikistan. Using this as its
financing method, the OBOR project has become
a more realistic plan.
The land-based Silk
Road branches into
three routes: the North
Line which starts in Bei-
jing and crosses Russia
and Germany to reach
Northern Europe; the
Middle Line which ranges from Beijing to XiAn,
Afghanistan, and eventually Paris; and the South
Line which links from Beijing to Pakistan, Iran,
Featured Articles
Linking transnational
economic corridors
and constructing
industrial complexes
and new cities
Table 1. OBOR’s Five Major Goals
Goals Details
Policy
coordination
Communication Inter-governmental communication regarding respective economic development strategies
Macro-policy exchanges Inter-governmental policy connection; joint formulation of collaboration methods
Support for cooperation Providing policy support for the implementation of practical cooperation and large-scale projects
Facility
connectivity
Transport Linking disconnected roadways; alleviating transport bottlenecks; and improving road network linkages
Energy Constructing cross-border power supply networks; cooperating on regional power grid upgrade and transformation
Communications Installing cross-border optical communications cables and undersea optical cables to connect continents
Unimpeded
trade
Convenience Removing investment and trade barriers; reducing clearance costs; improving customs procedures
Balance Finding new growth engines for trade; promoting balanced trade; expanding the scope of mutual investment
Encouragement Encouraging OBOR nations to invest in China and Chinese companies to invest in infrastructure
construction in OBOR nations
Financial
integration
Currency settlement Expanding the scope and scale of currency swaps and settlement
Financial cooperation Seeking cooperation between related nations through a special financial institution under the
Shanghai Cooperation Organization (SCO)
Financial funding Jointly establishing the AIIB and the New Development Bank; expediting the creation and operation of the
Silk Road Fund
Bonds Issuing yuan-denominated bonds by related countries and by companies with high credit ratings inside China;
issuing bonds of Chinese financial institutions and companies in yuan and foreign currencies outside China
People-to-people
bonds
Cultural training Annually providing 10,000 government scholarships in countries along OBOR; jointly applying for inscription
as UNESCO World Cultural Heritage sites; simplifying visa processes in related OBOR countries; conducting a project for
maritime Silk Road cruise liners
Medical care Enhancing joint responses to public medical accidents; providing medical relief and aid; expanding
cooperation in traditional medicine
Science and technology Constructing a joint research center, international technology transfer center, and maritime
collaboration center
Source: Vision and Actions on Jointly Building the Silk Road Economic Belt and 21st Century Maritime Silk Road, National Development and Reform Commission
(NDRC) of China, Chinese Ministry of Foreign Affairs, and Chinese Ministry of Commerce, March 28, 2015

4. Vol.03 June 2017 81
Turkey, and finally Spain. By examining its OBOR
policies, China can be seen to have been focusing
on connecting infrastructure facilities along the
land-based Silk Road.
China is currently constructing six trans-
national economic corridors in border areas: a
China-Mongolia-Russia corridor; a new Eurasian
land bridge of freight trains; a China-Central
Asia-West Asia corridor; a China-Pakistan corri-
dor; a Bangladesh-China-India-Myanmar corri-
dor; and a China-Indochina Peninsula corridor.
The Pakistan corridor is particularly meaningful
since it not only connects infrastructure between
the two countries, but also creates industrial
complexes along the route. This example clearly
illustrates how the OBOR infrastructure project
will be followed by the construction of industrial
complexes and new population centers in the
OBOR nations and their vicinities.
On May 14-15, 2017,
the Chinese government
held a major OBOR
summit in Beijing, par-
ticipated by 29 foreign
heads of states and
governments, to spur
the implementation of the initiative. The AIIB ex-
pects an additional 25 members to join this year.
There are several reasons why OBOR is rapidly
developing both internally and externally.
On the external front, first the US strategy of
The accelerating
OBOR project
Figure 2. OBOR’s Six Transnational Economic Corridors
Source: Compiled from the Chinese government and media reports
• Connected with Russia’s “Trans-Eurasian Belt
Development (TEPR)” and Mongolia’s
“Steppe Road” projects
• Agreed during the trilateral summit among China,
Mongolia, and Russia (September 2014)
• Lifted to the international strategic project (January 2015)
• NDRC released the “China-Mongolia-Russia Economic
Corridor Plan” and designated seven cooperation areas,
including infrastructure consotruction (September 2016)
• A 2,800-km network of roads and railways
• Implementation accelerated following President Xi’s
visit to India (September 2014) and Prime Minister
Modi’s visit to China (May 2015)
• A 10,900-km railway network to link from
Lianyungang in China to Rotterdam in the Netherlands
• Related to about 30 countries
• Aims to expand logistics, financial and information
exchanges with countries in the region and boost
local cooperation by linking roads and railways
China-Mongolia-Russia Corridor
Bangladesh-China-India-Myanmar Corridor
Construction of New Eurasian Land Bridge
China-Indochina Peninsula Corridor
Moscow
Irkutsk
Ulaanbaatar
Gwadar Port
New Delhi
Kolkatai
Dhaka
Hanoi
Bangkok
Singapore
Nanning
Russia
Beijing
Shenzhen
Kunming
Kuala
Lumpur
China-Central Asia-West Asia Corridor
• An oil and natural gas pipeline connecting
Xinjiang to the Persian Gulf, the Mediterranean
coast and the Arabian Peninsula
• Lines A, B and C between China and Central
Asia (in operation) and line D between
Turkmenistan and Xinjiang Uyghur
Chinese Steel Moves along the One Belt, One Road
China-Pakistan Corridor
• More than 30 MoUs signed during President Xi’s visit to
Pakistan (April 20, 2013)
• A USD 46 billion project to build a 3000-km network of
roads, railways, pipelines to transport oil and gas, fiber
cables, and industrial complexes from Pakistan’s Gwadar
Port to Kashgar City in Xinjiang to be scheduled by 2020

5. 82 Asian Steel Watch
a “pivot to Asia” has been suspended. Last Janu-
ary, President Donald Trump signed an executive
order formally halting US participation in the
Trans-Pacific Partnership (TPP) and demonstrat-
ed his intention to focus on domestic issues. The
OBOR project will accelerate in the absence of US
restraints on China.
Next, the countries linked through OBOR
feature high growth potential. More than half of
the 65 countries under the OBOR initiative are
developing countries with a per capita GDP below
USD 10,000 and have been driving rapid growth
in their respective regions. Since the 2000s, the
OBOR countries’ GDP growth rates have sur-
passed the global average. According to the World
Bank, the average GDP growth rate of OBOR
countries from 2000 to 2010 was 6.7%, surpass-
ing the global average by 3.9%p. During this pe-
riod, their annual average growth rates in trade
and FDI were 18.9% and 14.8%, respectively, far
higher than the global means of 1.5% and 9.0%.
Even since 2011, economic development along
the OBOR routes have shown a similar trajectory.
China is clearly attempting to accelerate the imple-
mentation of OBOR in order to reap the benefits
of the high growth potential in these regions.
On the internal front, first the Chinese gov-
ernment hopes to strike a balance in its regional
development by connecting developed eastern
China with less-developed central and western
China, and eventually to areas overseas. In some
eastern provinces, GDP per capita is three times
higher than that recorded in central and western
provinces. The OBOR project needs to be expedit-
ed in order to swiftly address such regional imbal-
ances.
Second, China is helping domestic companies
pursue foreign expansion into neighboring OBOR
countries by linking infrastructure with them.
In doing so, it hopes to address domestic overca-
pacity. The operation rate of Chinese industries
experiencing overcapacity stands at only around
60-70%. It is desperate for them to seek overseas
expansion.
Third, China is attempting to diversify the
routes for the transport of resources through
The Chinese steel industry has begun to search for a way forward
through OBOR for the following reasons. Projections for expanded steel
consumption based on OBOR are impressive; and steel demand should
further expand if OBOR countries expedite related development.
Featured Articles

6. Vol.03 June 2017 83
OBOR. As the Chinese economy expands, its de-
pendence on oil imports has been growing. About
80% of China’s oil imports pass through the
Strait of Malacca and the South China Sea, which
creates geographic concerns due to its vulnerabil-
ity to a US blockade. Therefore, in order to reduce
its dependence on these routes, China is seeking
to develop alternatives along the OBOR routes,
such as the Myanmar-China pipelines.
As Chinese economic growth slows, the gov-
ernment is working hard to identify new growth
engines. Given the high expectations for OBOR,
the country is expediting investment and de-
velopment in the OBOR region. According to
the Chinese Ministry of Commerce, Chinese
companies had established 56 economic zones
among OBOR countries by the end of 2016, with
an accumulated investment of USD 18.5 billion.
China’s trade with OBOR countries totaled USD
3.1 trillion for the last three years, accounting for
26% of total trade. If infrastructure connectivity
in this region increases, trade will rise as well.
During the initial peri-
od of reform and open-
ing-up (1978-2012), the
Chinese steel industry
grew quickly, borne
along by the country’s
rapid economic growth
and local governments’ competing investments.
China’s crude steel production was a mere 37.12
Mt in 1980, but had surged to 101.24 Mt by
1996, 222.34 Mt by 2003 and 512.34 Mt by
2008, finally peaking at 822.7 Mt in 2014. Its
compounded annual growth rate was 9.5% from
1980 to 2014. However, the Chinese steel indus-
try has been suffering severe aftereffects of this
accelerated growth: falling steel consumption
following the economic slowdown that has tak-
en place since 2014; prolonged oversupply with
declining steel prices; and suspension of facility
operations and a rising number of bankruptcies
stemming from the spike in financial, environ-
mental, and labor costs.
Under such circumstances, the Chinese steel
industry has begun to search for a way forward
through OBOR for the following reasons. First,
projections for expanded steel consumption based
on OBOR are impressive. Steel consumption is ex-
Chinese steel
moves along
the OBOR routes
(1,000 tonnes, kg)
Country
Apparent
Steel Use1
Apparent Steel Use
per Capita2 Exports3
Imports4 Net
Imports
Kazakhstan 2,943 167 1,705 505 -1,200
Russia 44,578 311 29,702 4,364 -25,338
Ukraine 3,823 85 17,721 804 -16,917
Uzbekistan 1,842 62 17 1,160 1,143
Bangladesh 4,209 26 5 3,967 3,962
India 89,353 68 7,563 13,284 5,721
Indonesia 13,656 53 2,003 11,413 9,410
Malaysia 11,629 383 1,823 7,816 5,993
Myanmar 2,605 48 2 2,420 2,418
Pakistan 7,087 38 53 3,411 3,358
Philippines 10,186 101 107 7,282 7,175
Singapore 5,100 910 1,729 5,180 3,451
Sri Lanka 1,028 50 1 951 950
Thailand 19,458 286 1,254 14,628 13,374
Viet Nam 21,226 227 1,512 16,343 14,831
Japan 67,800 536 40,804 5,918 -34,886
South Korea 58,125 1,156 31,173 21,674 -9,499
China 700,350 509 111,556 13,178 -98,378
Table 2. China and OBOR Nations’ Steel Use, Imports, and Exports (2015)
Note: 1) Crude steel equivalent, 2) kg crude steel, 3) 4) Semi-finished and finished steel products
Source: worldsteel
Chinese Steel Moves along the One Belt, One Road

7. 84 Asian Steel Watch
pected to increase by 30 Mt annually simply for the
transportation and infrastructure projects draw-
ing on central and local government investment.
Moreover, steel demand should further expand if
OBOR countries expedite related development.
Therefore, the Chinese steel industry has been
actively working on rationalizing distribution,
improving competitiveness, and accelerating
foreign investment under the OBOR initiative.
Steelmakers in Western Central China, including
JISCO and Panzhihua Iron and Steel, are finding
themselves playing a greater role and growing in
Featured Articles
Country/Region 2016 2015 2014 2013 2013-2016
CAGR(%)Group Country/Region Export Share (%) Export Share (%)
Major Area Asia 81,944 75.2 79,652 64,471 42,611 68.4 24.4
Europe 7,650 7.0 9,555 7,550 5,066 8.1 14.7
North America 1,894 1.7 3,334 4,512 2,804 4.5 -12.3
Latin America 7,806 7.2 9,574 9,552 6,485 10.4 6.4
Africa 8,844 8.1 9,437 6,912 4,717 7.6 23.3
Oceania 836 0.8 852 793 651 1.0 8.7
World 108,990 100 112,405 93,790 62,340 100 20.5
Asia Taiwan 2,526 2.3 2,502 2,823 1,561 2.5 17.4
India 3,330 3.1 4,762 3,798 1,646 2.6 26.5
Japan 1,263 1.2 1,328 1,567 772 1.2 17.8
Pakistan 2,925 2.7 2,556 1,461 795 1.3 54.4
Korea 14,350 13.2 13,496 12,969 9,724 15.6 13.8
Indonesia 5,839 5.4 5,105 3,402 2,248 3.6 37.5
Malaysia 3,350 3.1 3,312 2,484 1,808 2.9 22.8
Thailand 6,234 5.7 4,730 3,692 2,862 4.6 29.6
Vietnam 11,704 10.7 10,148 6,628 3,867 6.2 44.7
Singapore 2,970 2.7 3,226 3,215 2,935 4.7 0.4
Philippines 6,544 6.0 5,609 4,779 2,446 3.9 38.8
Cambodia 109 0.1 63 56 55 0.1 25.6
Laos 88 0.1 74 64 28 0.0 46.0
Myanmar 2,109 1.9 2,173 1,908 1,078 1.7 25.1
Brunei 145 0.1 136 85 98 0.2 14.1
CIS Russia 717 0.7 634 886 978 1.6 -9.8
Uzbekistan 270 0.2 249 383 457 0.7 -16.1
Ukraine 279 0.3 168 239 327 0.5 -5.2
Kazakhstan 239 0.2 239 308 513 0.8 -22.4
Kyrgyzstan 65 0.1 60 77 80 0.1 -6.8
Eastern
Europe/ME/
Africa
Turkey 2,104 1.9 3,060 1,283 577 0.9 53.9
Poland 238 0.2 159 161 106 0.2 30.9
Saudi Arabia 3,122 2.9 2,658 2,318 1,255 2.0 35.5
UAE 2,027 1.9 2,354 1,996 1,156 1.9 20.6
Iran 1,539 1.4 2,109 1,490 888 1.4 20.1
Qatar 178 0.2 167 137 83 0.1 28.8
Egypt 1,554 1.4 1,537 1,034 309 0.5 71.3
Source: Compiled by the author based on CEIC data
Table 3. China’s Steel Exports to Neighboring Countries (1,000 tonnes)

8. Vol.03 June 2017 85
importance since this western central area is the
starting point for the overland Silk Road. It is
crucial to increase the competitiveness of steel-
makers in this area in order to satisfy surging
steel demand in the region and penetrate into
neighboring foreign markets. To this end, the Chi-
nese government is sparing no effort in providing
related policies and funding.
Steelmakers in the Eastern and Northeastern
regions, such as Baowu Steel, Hebei Steel, and
Ansteel, are currently emphasizing strengthening
the competitiveness of steel mills in coastal areas.
By doing so, they are hoping to penetrate into
countries with high growth potential along the
maritime Silk Road. China is especially interested
in nations along this water route with high po-
tential for steel consumption or imports—India,
Thailand, Indonesia, Vietnam, Pakistan, and Ban-
gladesh, among others.
Second, over the recent few years Chinese
steel exports have been focused on the OBOR
nations. Since becoming a net steel exporter with
43 Mt in 2006 (import, 18.51 Mt), China’s steel
exports have continued to grow. Gross exports
hit a record high of 112.41 Mt and net exports
reached 99.37 Mt in 2015. Last year, steel ex-
ports surpassed 100 Mt. The type of steel prod-
ucts exported has been increasingly shifting from
low-grade steel products, such as long products,
to high-grade types, including flat products.
China’s major steel export destinations in-
clude South Korea and Southeast Asia. If the
OBOR project is accelerated and Chinese steel
competitiveness improves, steel exports to other
countries/areas, including India, Pakistan, and
the Middle East, will increase.
Lastly, if infrastructure connectivity with
OBOR nations improves, China is positively con-
sidering investing in nations with high growth
potential for steel. Since 1990, the accumulated
number of Chinese FDI cases in the steel industry
has surpassed 70, including 20 in the last three
years alone. This illustrates how the Chinese steel
industry is ramping up its foreign expansion. The
major current investment destination is South-
east Asia as part of efforts to create export hubs
and build service centers in key markets. The
nation’s foreign expansion still focuses on long
products. Additionally, it aims to address domes-
tic overcapacity and avoid environmental and
financial restrictions.
However, the focus of China’s OBOR expan-
sion will increasingly shift to flat products and
investment in foreign markets. After securing a
bridgehead in foreign markets, China is expected
to expand the value chain. This is line with the
overall OBOR process of constructing infrastruc-
ture in neighboring countries establishing ba-
sic industries creating industrial complexes
building new cities.
Deng Xiaoping initiated
“Reform and Opening up
1.0” in 1978, whereas Xi
Jinping has envisioned
his “Reform and Open-
ing up 2.0” in the form of
the OBOR project. While
this second phase will be implemented over the
next 30 years, the success of the project is directly
Chinese Steel Moves along the One Belt, One Road
How much will OBOR
change the future
of the Chinese steel
industry?

9. 86 Asian Steel Watch
linked to the future of the Chinese steel industry.
For OBOR to thrive, China needs to address
the following issues. First, the OBOR nations in
which China has the greatest interest are for the
most part developing countries with high-risk
business environments, including rampant cor-
ruption, inadequate legal systems, and unclear
policies. Second, advanced countries such as
the USA and European nations will increasingly
seek to rein in China during the implementation
of OBOR. China must work to minimize con-
flicts with these countries. Third, China needs
to reduce OBOR nations’ local antipathy to its
massive exports and investments. If China sim-
ply pursues its own interests without any ap-
parent benefits in the local communities, OBOR
cannot succeed. Fourth, Chinese companies
need to accumulate experience in foreign entry.
It has only been two to three years since China’s
foreign expansion began to take off; therefore,
the country needs to continue to amass know-
how in foreign expansion and strengthen local-
ized management.
If China properly addresses the above issues
and successfully pursues the OBOR project, its
steel industry will face a markedly different future.
Featured Articles
Company Announcement
Country of
Investment
Details of Investment
NISCO Mar. 2014 Indonesia Construction of JV producing wire rod and bar (with Gunung Gahapi)
WISCO Mar. 2014 Indonesia Construction of JV integrated steel mill (US$ 5 bil.)
DeLong Group May 2014 Thailand Investment in HR strip mill (annual capacity of 0.6 Mt)
June 2014 Malaysia Signing of MoU with local company Perak on ISM producing flat products
(3 Mt)
Panhua Group June 2014 Philippines Plan to build a pre-painted steel mill
SIPG July 2014 Malaysia Groundbreaking for steel PJT (3.5 Mt)
Kunming Steel Sep. 2014 Vietnam Operation of JV with VN Steel (annual capacity of 0.5 Mt)
WISCO Nov. 2014 India Establishment of electrical sheet service center
Tsingshan Steel Nov. 2014 Indonesia Building of nickel smelter plant JV
June 2015 Indonesia Signing on flat stainless steel project (3 Mt)
Shougang Jan. 2015 Malaysia Completion of first BF (0.7 Mt) of integrated steel mill (ISM) project
(Total 3 Mt)
Magang Mar. 2015 Kazakhstan Signing of MoU on steel PJT (1 Mt)
China Venture May 2015 Malaysia Plan to acquire stainless production line (RMB 400 mil.)
Ansteel July 2015 Indonesia Consideration of building new ISM (5 Mt)
Hebei Steel Apr. 2016 Serbia Acquisition of iron ore mine with 270 Mt reserves (‘14); the Hebei Provincial
Government approved ISM PJT (5 Mt) using this mine; acquisition of
Smederevo mill in Serbia
JISCO July 2016 Jamaica Acquisition of Jamaican aluminum processing plant
from Russia’s lUS RUSAL
WenAn Steel Aug. 2016 Malaysia Signing of MoU on building 5 Mt ISM
Source: Compiled from Mysteel and media reports
Table 4. Chinese Steel Investment in OBOR Nations (Including Plans)

10. Vol.03 June 2017 87
First, China can realign its steel industry
on the domestic and foreign levels through the
OBOR project, leading to maximized efficiency
in raw material procurement, steel production,
and sales. This will allow Chinese steelmakers to
increase their global competitiveness.
Second, the Chinese steel industry will be
able to enhance its overall technology and prod-
uct quality while exploring neighboring OBOR
markets. China is well aware that the project
cannot survive if based on obsolete facilities
and technologies. Experts also advise that the
Chinese steel industry requires advanced facil-
ities and technologies to reduce local antipathy
in the OBOR nations and advance into these
markets. The “Made in China 2025” and “In-
ternet Plus” initiatives aim to sophisticate and
smarten the steel industry. These initiatives will
become an important foundation for exploring
OBOR markets.
Finally, the Chinese steel industry should
boost its eco-friendliness and further reduce
environmental emissions over the process of
developing OBOR. Since China has already
experienced environmental and energy issues
during the rapid growth of its steel industry, it
can be expected to address environmental and
energy issues from the early stages of the OBOR
project. This is what neighboring countries an-
ticipate from China.
In conclusion, China’s OBOR project can
provide additional opportunities for global
steelmakers if it succeeds in increasing China’s
domestic steel demand and nurturing steel in-
dustries along OBOR. However, if the Chinese
steel industry monopolizes neighboring mar-
kets and competition intensifies among global
steelmakers in these regions, disputes could
certainly arise.
Since China holds the lion’s share of the
global steel market and its implementation of
OBOR is accelerating, the country’s impact on
neighboring countries, such as those in South-
east and Central Asia, is becoming increasingly
prominent. Therefore, the Asian steel commu-
nity needs to establish collaboration channels
among OBOR-related countries, companies, and
international organizations in accordance with
changing trends in Chinese policies. In addition,
necessary settlement measures among the Asian
countries should be emplaced before any conflict
or dispute becomes serious. If so, the Asian steel
industry will be able to pursue balanced and
sound development.
The Asian steel community needs to establish collaboration channels
among OBOR-related countries, companies, and international
organizations in accordance with changing trends in Chinese policies.
Chinese Steel Moves along the One Belt, One Road