Coal and steel still large and in charge - China’s latest business and technology news - SupChina

Coal and steel still large and in charge – China’s latest business and technology news

“Rebalancing with Chinese characteristics,” Christopher Balding, a professor at Peking University’s HSBC Business School in Shenzhen, declared upon hearing the news that China’s steel output had hit a record high in June. In doing so, he referred to two things: current president Xi Jinping’s years-long policy goal of “rebalancing” the economy away from heavy industry and toward services, and former leader Deng Xiaoping’s famous maxim about “socialism with Chinese characteristics,” a phrase that is often used derisively but refers to the government’s vision of China as a country with a balance of public sector control and private sector competitiveness.

Xi’s rebalancing act has not reduced the role of government-subsidized heavy industry and manufacturing: Quartz reports that record coal and steel output — a side of China’s economy that is both polluting and disproportionately state-owned — is largely responsible for recent economic growth trends. According to Bloomberg, a “factory rebound” led to these numbers, all of which slimly surpassed survey expectations by less than 0.5 percent, except for industrial output, which rose 1.1 percent above expectations:

  • GDP up 6.9 percent in the second quarter from a year earlier
  • Industrial output up 7.6 percent in June from a year earlier
  • Fixed-asset investment up 8.6 percent in the first half of this year
  • Retail sales up 11 percent from a year earlier in June

Lucas Niewenhuis

Lucas Niewenhuis is an associate editor at SupChina who helps curate daily news and produce the company's newsletter, app, and website content. Previously, Lucas researched China-Africa relations at the Social Science Research Council and interned at the Council on Foreign Relations in New York. He has studied Chinese language and culture in Shanghai and Beijing, and is a graduate of the University of Michigan.