HEBEI Province needs more Central Government aid to back its efforts to cut industrial capacity and restructure its economy, researchers with the country’s State planning agency said in a report published yesterday.

    The Policy Research Office of the National Development and Reform Commission (NDRC) said Hebei, China’s biggest steel-producing region, was facing heavy financial pressures when it came to resettling laid-off workers.

    The staging of the 2022 Winter Olympic Games in parts of Hebei has also widened the “funding gap” as the province rushes to meet its reforestation targets and plant nearly 100,000 acres of new trees around Olympic venues, the report said.

    As the economy slows, local firms were struggling to get access to financing, with the use of domestic loans and foreign capital dwindling this year, the researchers said after a two-day meeting with government and industry officials in the steel heartland of Tangshan last week.

    They said local governments also needed to overcome their resistence to foreign investment, which will play an important role in the country’s restructuring process.

    Steel accounts for about a quarter of Hebei’s economy, but the province is in the middle of a program aimed at cutting as much as 86 million tons of annual crude steelmaking capacity over 2013-2020 as part of the country’s efforts to tackle chronic overcapacity and smog.

    The province plans to shed 14.22 million tons of steel capacity this year alone. As well as closing capacity, Hebei aims to “relocate” production by investing in facilities abroad, with the Hebei Iron and Steel Group already acquiring plants in Serbia and South Africa.

    The NDRC researchers said constraints on the sector were helping to raise standards and create firms that had “genuine global competitiveness,” but more could be done to “optimize overseas steel product chains” by cooperating with countries in Africa or the “Belt and Road” initiative region, it said.

    (SD-Agencies)