1、 How to summarize the development of China's steel industry during the 11th Five Year Plan period?

The 11th Five Year Plan period was the fastest growing and most significant period for energy conservation and emission reduction in China's steel industry. The role of market allocation of resources continued to strengthen, and various forms of ownership of steel enterprises developed in coordination, effectively supporting the stable and rapid development of the national economy. On the other hand, structural contradictions such as product structure and layout are still prominent, and external factors such as resources and environment are gradually increasing their constraining effect on industry development.

During the 11th Five Year Plan period, China's crude steel production increased by 275 million tons, the largest increase in the previous five-year plan. Over the five years, it crossed three levels of 400 million, 500 million, and 600 million tons. In 2010, China produced 630 million tons of crude steel, accounting for 44.2% of the world's total production. While the total amount is rapidly increasing, a number of energy-saving and emission reduction technologies such as dry quenching, blast furnace coal injection, dry recovery of blast furnace gas and converter gas, and thermal storage combustion technology have been widely promoted. The energy management level of enterprises continues to improve. Key statistics show that the comprehensive energy consumption per ton of steel in steel enterprises has decreased from 694 kilograms of standard coal to 605 kilograms of standard coal, a decrease of 12.8%. The sulfur dioxide emissions per ton of steel have decreased from 2.83 kilograms to 1.63 kilograms, a decrease of 42.4%. The new water consumption per ton of steel has decreased from 8.6 tons to 4.1 tons, a decrease of 52.3%. During the 11th Five Year Plan period, China eliminated 123 million tons of outdated ironmaking capacity and 72.24 million tons of steelmaking capacity.

With the gradual improvement of the socialist market economy system, the fundamental role of the steel industry in allocating resources in market aspects such as investment and financing, factor flow, and enterprise operation has been further enhanced. State owned, private, and foreign-funded steel enterprises promote each other and develop in a coordinated manner. Most steel companies have established modern corporate governance structures, and 31 steel companies have raised funds in the stock market, continuously enhancing their vitality.

During the 11th Five Year Plan period, the structural problems of low product structure, scattered industrial organization structure, unreasonable layout, and large backward production capacity in China's steel industry, which existed in the rapid development process, have not been completely solved; The weak guarantee ability of resources such as iron ore, coking coal, and chromite has reduced profitability and increased market operational risks; The steel industry consumes a large amount of energy and emits pollution, further exacerbating its impact on energy and the environment.

2、 Why is it necessary and important to formulate and promulgate the "12th Five Year Plan" for the development of the steel industry (hereinafter referred to as the "Plan")?

The 12th Five Year Plan period is a crucial period for deepening reform and opening up, accelerating the transformation of development mode, and China's development is still in an important strategic opportunity period where great achievements can be made. The steel industry is an important foundational industry of the national economy and should play an active role in accelerating the transformation of the economic development mode. As the supervisory department of the steel industry, the Ministry of Industry and Information Technology has issued the "Plan", which is necessary to guide the structural adjustment, transformation and upgrading of the steel industry and better meet the needs of economic and social development.

The "Plan" implements the Scientific Outlook on Development, mainly based on the "Outline of the Twelfth Five Year Plan for National Economic and Social Development" and the "Industrial Transformation and Upgrading Plan (2011-2015)" that has been completed by the Ministry of Industry and Information Technology and submitted to the State Council. It closely combines with the actual development of the steel industry and is a specific refinement and implementation of the above two plans in the steel field. In the process of preparing the "Plan", the Ministry of Industry and Information Technology extensively solicited and absorbed opinions from relevant departments, localities, industry associations, and experts. The preparation of the "Plan" is a process of unifying the understanding of industry development, and the "Plan" is the crystallization of the collective wisdom of the industry.

Compared with previous plans for the steel industry, the 'Plan' emphasizes the fundamental role of the market and highlights the principles and directions of macro guidance in planning. As a guiding document for promoting the healthy development of the steel industry during the 12th Five Year Plan period, the "Plan" is an important basis for enterprises to formulate development plans and formulate development measures. It is of great significance for promoting China's steel enterprises to accelerate the improvement of international competitiveness, promoting the transformation of China's steel industry from focusing on scale expansion to focusing on variety, quality and efficiency.

3、 Why is it said that China's steel industry will enter a critical stage of transforming its development mode during the 12th Five Year Plan period?

During the 12th Five Year Plan period, China's steel industry will enter a critical stage of transforming its development mode based on a comprehensive analysis of the current situation, development trend, and external environment of China's steel industry.

Firstly, accelerating the transformation of the development mode of the steel industry is an urgent requirement for the national economy and social development. During the 12th Five Year Plan period, China will accelerate the transformation of its economic development mode and promote the construction of a resource-saving and environmentally friendly society. The steel industry is an industry that consumes a large amount of resources and energy. In 2010, it consumed 920 million tons of finished iron ore and 330 million tons of coke, accounting for 13.9% of the total energy consumption of the whole society. To enhance the sustainability of economic development, the steel industry must accelerate the transformation of its development mode to meet the requirements of national economic and social development.

The second is that accelerating the transformation of the development mode of the steel industry is a practical need for its own development. Although China's steel industry has made significant progress, the structural contradictions accumulated in the long-term extensive development process, such as product structure, industrial organization structure, and production layout, are still prominent, restricting the transformation of China's steel industry from large to strong. The original extensive model relying on scale expansion and massive consumption of resources and energy is difficult to continue, and the development mode must be transformed to promote the transformation of the steel industry from large to strong.

Thirdly, China's steel industry has a solid foundation for accelerating the transformation of its development mode. China's steel industry has a large scale and has made significant progress in variety quality, technical equipment, energy conservation and emission reduction. Some enterprises have strong international competitiveness, and the overall development level of the steel industry has reached a new level. It has already established a good foundation for accelerating the transformation of development mode and promoting the transition from large to strong.

4、 How does the 'Plan' assess the consumption of crude steel in China?

The assessment of crude steel consumption is a prerequisite for setting development goals for the steel industry, clarifying key tasks and policy measures, and is also one of the main reference indicators for the formulation of plans and policies in related industries and fields of the national economy. Its position in the "Plan" is very important. At the same time, forecasting the demand for crude steel is also one of the difficulties in planning, which is determined by the industry attributes of raw material industries such as steel. They are all passive industries, and their consumption is strongly influenced by the development speed of the national economy and the growth rate of fixed assets. The Plan analyzed and predicted the consumption of crude steel during the 12th Five Year Plan period and the medium to long term.

（1） Prediction of crude steel consumption during the 12th Five Year Plan period. The prediction of crude steel consumption during the 12th Five Year Plan period was carried out using two methods: actual research and indicator calculation. The analysis was mainly based on actual research, and the results were compared and confirmed through indicator calculation. The actual research methods used are industry consumption research method and regional consumption balance method: through research and analysis of 13 industries with actual steel consumption accounting for more than 90% of the national total, it is estimated that China's crude steel consumption in 2015 will be around 750 million tons; The regional consumption balance method predicts a consumption of 820 million tons in 2015 based on factors such as the actual consumption of crude steel in each province in 2010 and the GDP development targets announced by each province during the 12th Five Year Plan period. The indicator calculation method adopts the consumption coefficient and regression analysis method, and the predicted result range is 7.1-8.1 billion tons.

The actual research prediction of 750 million tons is within the predicted results of the indicator calculation, and it basically corresponds to the median of the results, indicating a high degree of fit between the two prediction results. Therefore, the "Plan" sets 750 million tons as the targeted consumption of crude steel in China for 2015.

Considering that the transformation of China's economic development mode requires a process, the original development mode will still maintain a certain inertia for a period of time. The growth of domestic crude steel consumption will remain at a high level in the early stage of the 12th Five Year Plan. For example, in 2011, China's crude steel production is expected to reach 690 million tons, an increase of 9.5%, and the apparent consumption is about 660 million tons, an increase of 11%. In some years in the future, the growth rate may even exceed the predicted value, and it is possible to break through the guiding forecast value of 750 million tons, approaching or reaching the upper limit of the forecast range.

（2） Analysis and prediction of crude steel consumption in the medium and long term. The "Plan" analyzes and references the development history of the steel industry in countries such as the United States, Germany, and Japan, taking into account the particularity, stages, and regional imbalances of China's development. Combined with the actual development of China's steel industry, several basic judgments have been made on the development trend of crude steel consumption in the medium and long term. One reason is that industrialized countries in the world mainly rely on domestic production of steel to complete industrialization. In the early stages of industrialization and urbanization, the total amount of crude steel grows rapidly, reaching a peak arc peak and maintaining it for a certain period of time. In the post industrialization period, the growth of the total amount of crude steel slows down, resulting in negative growth. The development of China's steel industry will still follow this law. Second, China has a large population, large land space, unbalanced development, and high steel consumption will remain for a long time. Thirdly, with the advancement of steel industry technology, steel will develop towards high strength, high toughness, and corrosion resistance. Steel will meet the consumption needs of various industries in the national economy on a new platform that is more material efficient. Therefore, the "reduction" factor of crude steel consumption must be considered. Fourthly, the development of steel in China is increasingly constrained by resource and environmental factors, which will limit the expansion of steel production capacity. Compared with the above countries, the peak consumption of crude steel per capita in China will be relatively low, but the duration of the peak arc crest area of the total amount of crude steel will be relatively long.

Based on the above judgment, using the per capita crude steel consumption method and the GDP consumption coefficient method, it is predicted that China's medium and long-term crude steel consumption may enter the peak arc zone during the 12th Five Year Plan period, with the highest peak possibly occurring between 2015 and 2020, with a peak of about 770 to 820 million tons.

5、 How to understand the variety quality objectives proposed in the 'Plan'?

Steel materials are the most widely used structural materials and important functional materials. There are still shortcomings in the quality of steel varieties in China's steel industry. One reason is that the product has a large quantity, wide coverage, low product grade, poor quality and stability, and meets the needs of national economic development at a low level. For example, in 2010, high-strength threaded steel bars with a strength of 400MPa or above accounted for only 40% of the total steel bar production in China, while most foreign countries use 400MPa, 500MPa, and even 600MPa or above. Secondly, the R&D and production capabilities of high-end products are not strong, and the connection with downstream industries is not smooth. High quality corrosion-resistant ship plates, large-diameter heat-resistant and high-pressure resistant pipes for ultra supercritical thermal power units, and other high-end products need further improvement in research and development, production, and industrial applications.

Therefore, the "Plan" proposes to improve product quality, enhance stability, and meet downstream demand, and puts forward specific development goals for variety quality from three aspects.

Firstly, for products such as high-strength and high toughness automotive steel and silicon steel sheets that can be developed and produced domestically but still cannot meet domestic demand, efforts should be made to strengthen the construction of upstream and downstream industrial chains, enhance the joint promotion of application mechanisms, improve quality consistency, achieve commercial and mass production, and increase self-sufficiency from the current 40-60% to over 90%.

Secondly, for products such as corrosion-resistant steel for ships and low-temperature pressure vessel plates that still face certain difficulties in domestic research and development, or have problems in industrial application, upstream and downstream cooperation should be promoted to strengthen the connection between production and application, in order to quickly promote their application on the first and first sets, and increase the self-sufficiency rate from below 30% to over 80%.

Thirdly, for products such as 400MPa and above high-strength threaded steel bars with high consumption, mature domestic production, and urgent need for upgrading and replacement, efforts should be made to increase production and promotion, and the production proportion should be increased from the current 40% to over 80%.

6、 What is the basis for proposing the energy-saving and emission reduction targets in the 'Plan'?

During the 11th Five Year Plan period, China's steel industry has made great progress in energy conservation and emission reduction, but there is still a certain gap compared to the international advanced level. One is that there are still about 75 million tons of outdated ironmaking and 40 million tons of outdated steelmaking capacity; Secondly, some energy-saving and emission reduction technologies have not been widely promoted and applied, such as sintering desulfurization technology, which only accounts for 20% of applications; Thirdly, the level of energy management in enterprises needs to be improved; Fourthly, there is an urgent need to promote the application of steel reduction; The fifth issue is that a complete circular economy system between various industries has not yet been formed. Overall, there is still room for exploring the potential for energy conservation and emission reduction in China's steel industry.

In view of the current situation of energy conservation and emission reduction in the steel industry, and in combination with the binding targets set by the country for energy consumption per unit of GDP, carbon dioxide emissions, and total emissions of major pollutants during the 12th Five Year Plan period, the "Plan" proposes energy conservation and emission reduction targets for China's steel industry during the 12th Five Year Plan period.

One is to propose the goal of eliminating outdated production capacity. During the 12th Five Year Plan period, the original standards will continue to be maintained, and blast furnaces with a capacity of 400 cubic meters or less (excluding casting blast furnaces), converters with a capacity of 30 tons or less, and electric furnaces will be eliminated. By eliminating outdated production capacity with high energy consumption and pollution, promoting structural adjustment in the steel industry, and reducing energy consumption and pollutant emissions.

Secondly, from the perspective of promoting energy-saving and emission reduction technologies, it is proposed to focus on statistics that the dry quenching rate of coke ovens in steel enterprises should reach over 95%. In key tasks, it is required that all sintering machines be equipped with flue gas desulfurization and waste heat recovery devices, and all blast furnaces be equipped with high-efficiency coal injection and waste heat and pressure recovery devices.

Thirdly, the steel industry has a relatively high energy consumption and total emissions, and must bear greater responsibilities and obligations in the binding indicators proposed in the 12th Five Year Plan for National Economic and Social Development. Therefore, based on the actual development of the industry, the "Plan" measures the potential of various indicators and proposes to reduce energy consumption and carbon dioxide emissions per unit of industrial added value in the steel industry by 18% in 2015. This target is higher than the national target of 16%, but lower than the industrial industry target of 20%. This is mainly due to the fact that China's steel industry energy conservation is already at a relatively leading level, and the energy-saving potential is relatively small compared to other industrial industries. The goal of reducing energy consumption by 18% is still very difficult, and it is necessary to increase added value and comprehensively promote energy conservation and emission reduction in order to achieve this goal. It is worth mentioning that the "Plan" proposes to reduce sulfur dioxide emissions per ton of steel by 39%, which is equivalent to a 27% decrease in total emissions compared to 2010, far higher than the national target of 8%. This is mainly due to the fact that China's steel industry has just started sintering desulfurization, with low desulfurization rates and great desulfurization potential. During the "12th Five Year Plan" period, the goal of significantly reducing sulfur dioxide emissions per ton of steel can be achieved by popularizing sintering desulfurization.

7、 Why should improving the quality, grade, and stability of steel products with large quantities and wide coverage be the top priority in product structure adjustment?

The steel products used in construction, such as threaded steel bars, wire rods, medium thick plates, and hot-rolled plates, account for more than 80% of China's steel product production. They are the key to supporting the development of the national economy, meeting the steel demand of downstream industries, and transforming development. Currently, the main problem with these types of steel products is that their variety, grade, and stability still have a considerable gap from the international advanced level. In the past, the industry mainly focused on the development of scarce varieties, and did not pay enough attention to these large and widely used varieties, resulting in insufficient energy and affecting the overall improvement of the industry level.

During the 12th Five Year Plan period, the contradiction in the quantity of China's steel industry has greatly weakened. The adjustment of product structure is no longer about increasing or decreasing the quantity, but focuses on improving the quality of steel products, promoting the transformation and development of downstream industries, and promoting resource conservation and energy conservation and emission reduction. Therefore, the "Plan" proposes to prioritize the improvement of the quality, grade, and stability of large-scale and wide range steel products as the top priority in product structure adjustment.

Improving the quality, grade, and stability of large-scale and wide-ranging steel products will promote the application of steel reduction, support the transformation and upgrading of downstream industries, and alleviate the resource, energy, and environmental constraints of steel production. This is of great significance for accelerating the transformation of China's steel industry from focusing on scale expansion to focusing on variety, quality, and efficiency, and even enhancing the competitiveness of China's manufacturing industry.

Taking the use of threaded steel bars in the construction industry as an example, during the 12th Five Year Plan period, the proportion of high-strength threaded steel bars with a strength of 400MPa or above increased from 40% to 80%, which can reduce the use of steel bars by 10 million tons per year, reduce iron ore consumption by about 16 million tons, and reduce carbon dioxide emissions by about 20 million tons.

8、 How to understand encouraging a small number of powerful steel enterprises to develop high-end steel varieties and prevent the homogenization of high-end products?

The production and sales scale of high-end steel varieties is relatively small, with high barriers in technology, standards, and certification. The R&D and production investment is large, the cycle is long, and the risk is high. The products are mostly directly supplied and sold, with strong user exclusive demand and high loyalty, making market development difficult.

The above characteristics of high-end steel varieties determine that their research and development, production, and industrial application require high capital investment, technological capabilities, and market development from steel enterprises. The risk is also much higher than that of ordinary products with large quantities and wide coverage. If most enterprises increase investment and research and development to produce high-end products, it will inevitably lead to repeated construction of high-end products, waste of funds and talents, and disorderly market competition. For example, in the automotive steel plate market, 70-80% of the market is currently occupied by Baosteel and foreign companies, while other companies can only compete in the remaining relatively low-end market, resulting in poor profitability; For example, X80 pipeline steel, due to the increasing number of production enterprises and oversupply in recent years, the profit per ton of steel was only a few tens of yuan for a period of time.

The Plan proposes to encourage a small number of strong steel enterprises to develop high-end steel varieties in a differentiated manner, to prevent the homogenization of high-end development. The purpose is to guide enterprises with advantages in talent, technology, capital, and R&D system to strengthen cooperation with downstream users according to market demand, develop high-end steel products, guide enterprises to find their positioning according to their respective conditions, and avoid many enterprises blindly investing in the research and development of high-end steel varieties, forming a situation of high investment, low returns, and even losses.

9、 How to continue promoting the effective elimination of outdated production capacity in the steel industry during the 12th Five Year Plan period?

Eliminating outdated production capacity is an important means to accelerate the upgrading of equipment structure in the steel industry, promote energy conservation and emission reduction, and optimize layout. During the 12th Five Year Plan period, we should continue to promote the effective elimination of outdated production capacity in the steel industry based on the work already carried out, and strive to comprehensively eliminate outdated production capacity determined according to existing standards. This is one of the important indicators of whether the steel industry has achieved a transformation in its development mode.

One is to completely eliminate outdated production capacity in accordance with laws and regulations. During the 11th Five Year Plan period, China's steel industry made great progress in eliminating backwardness, with a total of 122.72 million tons of outdated ironmaking capacity and 72.24 million tons of steelmaking capacity eliminated. The vast majority of outdated equipment was completely dismantled, and an effective system and mechanism were established. However, there are still 75 million tons of outdated ironmaking capacity and 40 million tons of outdated steelmaking capacity that have not been eliminated. Therefore, during the 12th Five Year Plan period, it is necessary to strictly follow relevant laws and regulations to completely eliminate them.

Secondly, we will no longer continue to raise the standards for eliminating outdated equipment. At present, using equipment capacity as the standard for eliminating outdated production capacity is mainly due to the fact that it is relatively easy to distinguish when implemented in various regions, but it also leads to some enterprises continuously expanding furnace capacity, resulting in an increase in production instead of a decrease. Therefore, in the future, the elimination of outdated equipment will mainly be based on energy and material consumption and clean production standards, in order to avoid negative effects such as continuous expansion and renovation of outdated equipment by enterprises to avoid elimination, resulting in substantial capacity expansion or false reporting of equipment capacity. With the deepening of scientific development, especially the improvement of energy conservation and emission reduction assessment systems, we need to gradually form a social environment where backwardness cannot survive.

The third is to clarify the relationship between eliminating backwardness and developing the steel industry. Making the elimination of backwardness one of the prerequisites for the development of the steel industry. The Plan proposes to combine the promotion of large-scale projects with the suppression of small-scale ones, and to eliminate outdated projects with the introduction of new ones; Based on the elimination of outdated production capacity in various regions, priority will be given to approving technological transformation projects for regions and enterprises that have completed the elimination of outdated tasks well.

Fourthly, strict certification of blast furnaces should be implemented, and the backdoor for eliminating outdated ironmaking capacity should be closed. In order to avoid using iron for casting to avoid elimination and ensure the development needs of the casting industry, the competent departments of industry and information technology are recognizing pig iron enterprises for casting and implementing dynamic management. While promoting the elimination of outdated ironmaking capacity, they are also promoting the structural adjustment and transformation upgrading of the casting industry.

10、 How does the Plan consider technological innovation and transformation in the steel industry during the 12th Five Year Plan period?

Technological innovation and transformation play an important supporting role in the structural adjustment, transformation and upgrading of the steel industry. During the 12th Five Year Plan period, technological innovation and transformation should continue to serve the structural adjustment, transformation and upgrading of the steel industry.

The Plan puts forward specific requirements for technological innovation in the steel industry from two aspects. Firstly, the direction of technological innovation in the steel industry should be strengthened in terms of processes, technological equipment, new products and materials, energy conservation and emission reduction, and resource utilization. Secondly, a sound technological innovation system should be established to accelerate the establishment of a technology innovation system and mechanism with enterprises as the main body, market orientation, and the combination of industry, academia, research and application.

The historical experience of the development of China's steel industry has proven that technological transformation is an effective means to maximize investment and produce benefits as soon as possible. During the 12th Five Year Plan period, the development of China's steel industry is facing a situation of shifting from focusing on scale expansion to focusing on quality and efficiency. The connotation and key tasks of technological transformation in the steel industry will also change accordingly. That is, technological transformation should change the previous practice of improving quality and equipment level, while also driving production capacity growth, and instead focus on improving variety quality, promoting energy conservation and emission reduction. The result of transformation may be a decrease in production capacity, and some environmental protection measures may increase costs, but the performance of steel will be higher, the usage will be reduced, and it will be more coordinated with urban development. To this end, the "Plan" proposes five main areas for the technological transformation of the steel industry during the 12th Five Year Plan period, namely variety quality, resource development, energy conservation and emission reduction, process technology, and integration of industrialization and informatization, and clarifies the specific technological transformation priorities for each area.

11、 How to understand the ideas of promoting the optimization layout of the steel industry during the 12th Five Year Plan period?

The "Plan" points out that during the 12th Five Year Plan period, it is necessary to combine mergers and acquisitions with the elimination of backwardness, optimize industrial layout without increasing production capacity, and put forward specific requirements for the development of steel in key regions.

Firstly, in principle, no new steel bases will be built in the Bohai Rim region (Beijing, Tianjin, Liaoning, Hebei, and Shandong provinces) and the Yangtze River Delta region (Jiangsu, Shanghai, and Zhejiang provinces). The steel supply in the Bohai Rim region of our country is severely exceeded by demand, with steel consumption in the region accounting for less than 50% of production capacity. Most of the steel flows to other regions mainly in the south. Due to the scarcity of water resources and high environmental pressure in the region, the sea freight distance for imported iron ore is long, and the long-distance transportation of steel has added to the transportation load. The Yangtze River Delta region has a developed economy, with a large production and consumption of steel, and is in a weak balance of supply slightly exceeding demand. The region is facing a shortage of land, energy supply, and small environmental capacity. During the 12th Five Year Plan period, it is necessary to participate in higher-level international cooperation and competition, and lead the country in transforming the economic development mode, adjusting the economic structure, and independent innovation. Therefore, it is not advisable to build new steel bases in either region.

Secondly, we will continue to promote the construction of steel bases along the southeast coast. There are several main considerations to consider: (1) alleviating the supply-demand contradiction and supporting regional economic development. At present and in the future, steel production in the Pearl River Delta and surrounding areas cannot meet regional demand. Most of them are high value-added products, and the supply-demand contradiction is prominent. Accelerating the construction of Zhanjiang and Fangchenggang steel boutique bases is conducive to alleviating the supply-demand contradiction. Advancing the construction of the Ningde Iron and Steel Base in Fujian is to implement the national development strategy on the west coast of the Taiwan Strait and provide strong support for regional economic development. （2） Promote major layout adjustments in the steel industry. The overall layout of China's steel industry has been basically formed. If the layout is further completed along the southeast coast, the major layout of China's steel industry can be basically completed in the future. Promoting the construction of steel bases along the southeast coast is also conducive to curbing the blind expansion of steel production capacity in areas with overcapacity, completely dispelling the consideration of these areas targeting the Pearl River Delta market. （3） Accelerating the construction of steel bases along the southeast coast during the 12th Five Year Plan period is a concrete implementation of the policy of maintaining pressure, which is conducive to promoting the strategic layout and optimization upgrading of Baosteel, Ansteel, and WISCO, fostering the formation of steel enterprise groups with international competitiveness, and promoting the transformation of China's steel industry from large to strong.

Thirdly, some relatively independent markets in the western region have moderately developed the steel industry. The iron and steel industry in the western region has a certain foundation, but it is still relatively backward. With the further development of the western development, the state has increased investment in the western region. The growth of fixed assets investment in the western region has significantly accelerated, and there is still some room for steel demand in some parts of the western region. The western region can develop the steel industry moderately in areas with certain resource, energy, and market advantages, combined with regional differentiation policies. On the one hand, this is conducive to promoting the development of the western region and enhancing economic strength, narrowing the gap between the east, center, and west, and on the other hand, it helps to adjust the structure and transfer of the steel industry in the eastern region. But it is necessary to plan and develop in an orderly manner based on resources, energy, and markets. The plan proposes to focus on supporting border areas such as Xinjiang, Yunnan, and Heilongjiang, actively exploring the use of surrounding overseas minerals, energy, and markets, and developing the steel industry.

　12、 What considerations does the 'Plan' have for the development of urban steel mills?

According to statistics, in 2010, the crude steel production of 39 urban steel mills in China accounted for nearly 40% of the total national production. With the improvement of urban development level and the expansion of steel enterprise scale, the contradiction between urban steel mills and urban functions is becoming increasingly apparent. In terms of industrial structure, resources, environment, energy, land, transportation and other aspects, some steel enterprises cannot adapt to the new requirements of urban development. Faced with difficulties, some urban steel mills such as Tangshan Iron and Steel South District and Taiyuan Iron and Steel have achieved coordinated development with the city through technological transformation, developed circular economy, gradually alleviated contradictions, and achieved initial progress. A small number of urban steel mills, such as Shougang, Chongqing Iron and Steel, and Dalian Steel, have overcome numerous difficulties and implemented relocation. The development of both cities and enterprises has entered a new stage, but the economic and social impact it has caused needs long-term attention and proper response. Some urban steel mills are exploring and researching the implementation of relocation and renovation.

The transformation of urban steel mills and the relocation and renovation of distant or close distances are only means rather than ends. The starting point for the development of urban steel mills must be people-oriented, based on the development positioning of the city, the position and role of steel mills in the urban economy, and the strength of the enterprise. Especially, factors such as employment and living of enterprise personnel should be considered to take a differentiated development path that is suitable for the actual situation of the enterprise and has regional characteristics, rather than blindly pursuing relocation, and cannot expand production capacity through relocation.

Existing urban steel mills should learn from the experience of Tangshan Iron and Steel South District and Taiyuan Iron and Steel, strive to achieve coordinated development with the city through on-site renovation and upgrading, and continue to play an important role in local economic and social life. For steel mills that are incompatible with urban development, relocation, renovation, or transformation development should be implemented based on the capacity of the city, enterprises, employees, and society to bear. When choosing a new factory location for relocation, it is important to consider the possibility and affordability of long-term work and life for the majority of employees, and carefully select the relocation site.

13、 How to handle the relationship between domestic and overseas iron ore resource development during the 12th Five Year Plan period, and how to establish a guarantee system for China's iron ore resources?

With the rapid development of the domestic steel industry, the trend of global allocation of iron ore resources in China has been formed. In 2010, the number of source countries for iron ore imports in China reached 40 (which had expanded to 63 in 2011), with an import volume of 618 million tons, accounting for about 67% of the total iron ore consumption, an increase of nearly 32 percentage points from ten years ago. Driven by high ore prices and high returns, domestic iron ore production increased by 26.4% from January to October 2011, while imported iron ore increased by 10.9%. The growth rate of domestic ore was higher than that of imported ore.

There are various opinions on how to improve the guarantee of ore. The focus is on two aspects: firstly, increasing the development of domestic mines to improve self-sufficiency and enhance discourse power; The second is to increase the development of foreign mines and increase the proportion of equity mines. The 'Plan' proposes a new approach, considering the low grade, poor endowment, and high mining costs of China's iron ore resources. We believe that in this situation, from the perspective of resource internationalization and energy conservation and emission reduction, it is correct and inevitable to use more imported minerals, and imports should be encouraged rather than a problem. The problem is that Chinese steel companies have no say in the pricing of imported minerals. The key to solving this problem is to encourage steel companies to go global, not only to mine, but more importantly, to build factories and transport steel billets or steel materials in, rather than just developing domestically. Encouraging enterprises to go global and build steel plants is a major strategy for the development of the steel industry during the 12th Five Year Plan period, while improving the guarantee of domestic iron ore resources is a second level issue. Therefore, the plan did not address the low supply ratio of domestic mines as a problem, nor did it propose the guarantee ratio of domestic mines as a goal. During the 12th Five Year Plan period, it is necessary to link the establishment of China's iron ore resource security system with the development of the steel industry, rather than just discussing security. The key work is to develop and utilize international resources, establish stable and reliable supply bases and transportation guarantee systems for raw materials such as iron ore, chromium ore, manganese ore, coking coal, etc. in countries and regions with resource advantages and neighboring countries. The second is to increase the exploration efforts of domestic iron ore resources, improve the comprehensive utilization level of tailings recycling, and promote the integration of existing mine resources. The third is to strengthen and improve the management of imported iron ore, research and guide the establishment of a market friendly iron ore price formation system that can achieve long-term coordinated development between upstream and downstream, and regulate the domestic iron ore market order. The fourth is to support domestic steel enterprises and other enterprises to "go global" and invest in the construction of steel plants overseas, and to invest in and participate in foreign steel enterprises. The fifth is to promote the reduction of steel consumption, improve the level of scientific use of steel, and reduce the consumption of iron ore. Sixth, we will increase the construction of the scrap steel recycling system, focus on building a number of scrap steel processing demonstration bases, and improve the processing, recycling, and distribution industry chain.

　　14、 What is the necessity of promoting mergers and acquisitions in the steel industry, why is it necessary to promote both cross regional mergers and acquisitions of key large enterprises and intra regional mergers and acquisitions, and how is the goal of 60% industrial concentration development considered?

There are over 7000 enterprises in China's steel industry, among which more than 500 produce crude steel, with an average scale of only over 1 million tons. The crude steel production of the first four steel enterprises accounts for only 27.8% of the total national production, far behind the levels of 70% to 90% in the United States, Japan, and South Korea. The low concentration of industries has to some extent led to or exacerbated problems such as blind investment, redundant construction, and disorderly competition, seriously restricting the improvement of innovation and industry self-discipline in China's steel industry. During the 12th Five Year Plan period, mergers and acquisitions are an important lever for promoting the structural adjustment of China's steel industry, and also a necessary path for China to form internationally competitive steel enterprise groups. It is necessary to combine the elimination of backwardness, technological transformation, and layout optimization to deeply promote the merger and restructuring of China's steel enterprises.

The Plan clearly proposes to focus on supporting advantageous large steel enterprises to carry out cross regional and cross ownership mergers and reorganizations, and actively support the mergers and reorganizations of regional advantageous steel enterprises. One is the complexity and diversity of China's development, which has led to the emergence of two dominant models in the merger and reorganization of China's steel industry, which are both mutually exclusive and objectively existing. From the current development perspective, these are merger and reorganization models that are in line with the actual development of China's steel industry. Secondly, these two models still have significant implementation space during the 12th Five Year Plan period and will play a major role in accelerating the merger and restructuring process of China's steel industry. In addition, the "Plan" proposes to support these two merger and reorganization models, which does not mean to deny or oppose other merger and reorganization models. It also encourages various regions and enterprises to explore various forms of merger and reorganization, such as upstream and downstream reorganization. As long as it is conducive to the structural adjustment, transformation and upgrading of the steel industry, and to the synergistic effect and competitiveness improvement of restructured enterprises, it should be supported.

In the Opinions of the State Council on Promoting Enterprise Mergers and Acquisitions, it is emphasized that mergers and acquisitions should give full play to the main role of enterprises, adhere to market-oriented operations, and be guided by the government. On the one hand, it is necessary to fully leverage the fundamental role of market mechanisms, regulate administrative behavior, and enable enterprises to carry out mergers and acquisitions through equal consultation and compliance with laws and regulations, in order to prevent "mismatched" situations. On the other hand, we should pay attention to strengthening the government's coordination and management of mergers and acquisitions of steel enterprises, promote mergers and acquisitions of steel enterprises steadily and efficiently, and avoid negative impacts caused by vicious competition and forced mergers. At the same time, guide enterprises to combine mergers and acquisitions with the elimination of backwardness, energy conservation and emission reduction, and transformation and upgrading, maximize the synergistic effect of mergers and acquisitions, and effectively enhance the competitiveness of enterprises.

The "Plan" proposes that by the end of the 12th Five Year Plan, the industrial concentration of the top ten steel enterprises will increase to 60%. This has increased by 12 percentage points on the existing basis. Firstly, considering the complexity of mergers and acquisitions in China's steel industry, it is difficult to significantly increase industrial concentration in the short term; Secondly, China has a vast territory and uneven regional development. The steel industry is large in scale and scattered, with multiple forms of ownership coexisting in steel enterprises. The management system has obvious characteristics. It is difficult for China's steel industry to account for 70-80% of the production with 2-3 enterprises like Japan, South Korea and other countries. This is not in line with China's national conditions and is also unrealistic. Therefore, proposing a development target of 60% is more in line with China's reality.

　　15、 Why promote cooperation with downstream users during the 12th Five Year Plan period and how to strengthen the construction of the steel industry chain?

For a long time, China's steel industry has attached great importance to production, construction, and operation, neglecting coordination and cooperation with downstream industry users, emphasizing product manufacturing, and neglecting service provision. The degree of integration with downstream industries is low, and the connection between steel product research and development, production, and application is not close. Resulting in slow upgrading of steel products in downstream industries and inability to find customers for new steel products. For example, the promotion and application of high-performance steel materials with mature production technologies such as high-strength threaded steel bars are slow, and high-end products such as nuclear power evaporator tubes and stainless steel furnace tubes for ultra supercritical power plant boilers that already have production conditions are difficult to achieve industrial application in China.

The inability to effectively connect upstream and downstream industries greatly weakens the competitiveness of the industrial chain. The competition in modern manufacturing has evolved to some extent from competition between individual enterprises to competition between industrial chains. Establishing long-term stable and mutually beneficial cooperative relationships with advantageous enterprises in the industrial chain has become one of the key factors for enterprises to seek higher-level development. We believe that the extension of the industrial chain is the key to solving homogeneous competition and alleviating overall pressure, and is one of the signs of a company's transformation from large to strong. Therefore, the "Plan" emphasizes that steel enterprises should transform their service concepts, enhance their service awareness, establish strategic cooperation mechanisms with downstream users, and promote the transformation of steel enterprises from steel material producers to service providers.

To strengthen the construction of the industrial chain, steel enterprises should first attach importance to establishing close cooperative relationships with downstream users, timely understanding, and even guiding customer needs. With the progress of society, downstream users not only have new demands for the quality of steel varieties, but also have higher requirements for related services. Steel companies must closely connect with users and timely grasp the changes in their various needs. Secondly, in the face of increasingly fierce market competition, steel companies need to accelerate the transformation of service concepts and improve customer management and service levels. Compared to selling products, providing services has higher requirements and broader connotations, covering the entire lifecycle process from product research and development, production, application to recycling. Only by putting users at the center and establishing an open service system that provides complete material solutions for downstream users can steel enterprises continuously improve their service level and gain an advantage in market competition.

16、 What is the necessity of further improving the internationalization level of China's steel industry during the 12th Five Year Plan period?

The necessity of further improving the internationalization level of China's steel industry during the 12th Five Year Plan period is mainly manifested in the following aspects:

One reason is that China's rapid development over the past 30 years has relied on reform and opening up, and our future development must also firmly rely on reform and opening up. This is a policy repeatedly emphasized by the Party Central Committee, a key decision that determines the fate of contemporary China, and a necessary path to realizing the rejuvenation of the Chinese nation. The problems of imbalance, lack of coordination, and unsustainability in China's development are prominent, and the institutional obstacles that constrain scientific development cannot be avoided or bypassed. They must be resolved through deepening reform and opening up.

Secondly, China's steel enterprises have a considerable amount of equipment that has reached the world's advanced level, but they lag behind the world's advanced steel enterprises in terms of management and development innovation. The Chinese steel industry has considerable strength. We must dare to attract top foreign steel companies to invest in and participate in domestic steel companies, attract them to participate in major projects, and be willing to give benefits to the other party in order to quickly improve our management and development capabilities. We have successful precedents in this regard. The cooperation between Wuhan Iron and Steel and Nippon Steel Silicon Steel has achieved a breakthrough in China's zero oriented silicon steel. The cooperation between Baosteel, Nippon Steel and Aselo, and Ansteel and Thyssen has promoted the rapid improvement and industrialization of automotive panels. When China's steel industry was backward, it relied on reform and opening up to develop itself and not be eaten up by others. Now China has more conditions and capital to open itself up. History will prove that reform and opening up is an inevitable choice for China's steel industry.

Thirdly, improving the internationalization level of China's steel industry is in line with the global trend of steel industry development. The development of the world steel industry has become a global industry, and its level of internationalization is increasing. Firstly, there is the global allocation of resources, with major international markets for iron ore, coke, scrap steel, manganese ore, chromium ore and other steel raw materials and auxiliary materials, and increasing trade volume; Next is the global configuration of products, and the trading scale of the international steel market continues to expand; Once again, it is the global configuration of technical equipment and engineering services, and the business of the world's major steel engineering companies and equipment manufacturers has already crossed national borders; Finally, there is investment in global allocation. Despite various restrictions imposed by some countries and regions on investing in the steel industry, multinational steel conglomerates continue to emerge, with increasing scale and influence. From the perspective of the development trend of the world steel industry, it is a general trend for China's steel industry to improve its internationalization level.

The fourth is to improve the internationalization level of China's steel industry, which is necessary to promote the transformation of China's steel industry from large to strong. China's crude steel production scale has long ranked first in the world, but its competitiveness is not strong. One important aspect is that China's steel enterprises are too concentrated in local operations, lacking discourse power in the global resource and product markets, and relatively backward in technology and management, which puts them in a disadvantageous position in international competition. To achieve the transformation of China's steel industry from large to strong, it is necessary to cultivate and form international large-scale steel enterprise groups, continuously improve technology and management levels, strengthen international operations, and enhance international competitiveness through "introduction" and "going global".

Improving the internationalization level of China's steel industry is an essential requirement for promoting its sustainable development. The steel industry has strongly supported the needs of national economic development during its rapid development, while resource, energy, and environmental constraints have become increasingly prominent. In the coming period, China's industrialization and urbanization will continue to develop, and the demand for steel will remain at a high level. The steel industry must take measures to alleviate resource, energy, and environmental pressures while meeting the needs of national economic development. Improving internationalization and investing in overseas development are important aspects of this.

　　17、 How does the Plan consider strengthening the standardization of the steel industry during the 12th Five Year Plan period?

Standardization is one of the important symbols of modern manufacturing industry, and its level and impact to some extent reflect the strength of a country's manufacturing industry. In recent years, the pace of standardization construction in China's steel industry has accelerated, providing important support and guarantee for the development of China's steel industry. However, there are also problems with standard formulation and revision falling behind the needs of rapid development and incomplete coverage. During the 12th Five Year Plan period, it is necessary to further strengthen the position and role of standards in the management of the steel industry, effectively support and even lead the upgrading of steel industry products, technological transformation, and management innovation, and smoothly and orderly promote the structural adjustment, transformation, and upgrading of the steel industry.

One is to strengthen upstream and downstream cooperation, accelerate the formulation, revision, and upgrading of standards. In accordance with the requirements of the transformation of the steel industry from focusing on the main production and operation of steel to emphasizing the coordinated development of production and services, with a focus on strengthening cooperation with downstream users and coordinating with upstream suppliers of raw materials, energy, etc., we will accelerate the formulation, revision, and upgrading of relevant standards to better promote product upgrades and optimize raw material supply.

The second is to fully implement standardization. Expand the coverage of standards, promote standardization in various fields such as variety quality, energy conservation and emission reduction, technological transformation, design and manufacturing, management and operation, and safety production in the steel industry, and promote standardized development in all aspects of the steel industry based on standards.

The third is to establish a standardized system with steel production enterprises as the main body. Steel production enterprises are the direct implementers of various standards, and they should fully play their main role in standardization. Relevant departments and industry organizations should strengthen organizational management and supervision, guide enterprises to attach importance to promoting the revision of standards according to their development needs and characteristics, and use the strengths of one or several companies to serve the development of the industry.

　　18、 During the 12th Five Year Plan period, which aspects will the industrial and information technology authorities focus on strengthening policy guidance for the steel industry?

Policy guidance is an important means to strengthen and improve macroeconomic regulation and industry management in a market economy, and it is also one of the main functions of the Ministry of Industry and Information Technology. During the 12th Five Year Plan period, our department will strengthen policy guidance for the steel industry by revising policies and regulating production and operation. We will also urge local industrial and information technology authorities to implement relevant policies.

One is to revise the steel industry policy in a timely manner. According to the requirements of national macroeconomic regulation and the development of the national economy and society, combined with the actual development of China's steel industry, timely revise the policies of the steel industry, strengthen the connection with relevant policies such as finance, taxation, land, and environmental protection, clarify the development direction, and stipulate the development principles, as a guiding document for the macro and systematic development of the steel industry.

Secondly, in accordance with the requirements of the "Several Opinions of the General Office of the State Council on Further Increasing Energy Conservation and Emission Reduction Efforts and Accelerating the Structural Adjustment of the Steel Industry" (State Council Document [2010] No. 34), we will accelerate the promotion of production and operation standards in the steel industry, and announce the list of enterprises that meet the production and operation standards in batches. This provides important basis for relevant departments and financial institutions to guide the flow of iron ore, issue production licenses for construction steel, promote mergers and acquisitions of steel enterprises, eliminate outdated production capacity, and support the development of advantageous enterprises.

The third is to formulate and release guidance on mergers and acquisitions in the steel industry, a directory of advanced technologies, products, and equipment in the steel industry, as well as investment guidelines for the steel industry.

　19、 What aspects should we focus on improving the management system of the steel industry during the 12th Five Year Plan period?

During the 12th Five Year Plan period, efforts need to be made to strengthen and improve the management system of the steel industry from the following aspects.

One is to create a fair competition market environment. The current production and operation order in the steel industry is still very irregular, with illegal and irregular phenomena such as tax evasion, counterfeiting, and environmental pollution, as well as historical legacy problems, still existing in some regions and stages. The management of the steel industry should first create a fair competition market environment, improve market entry and exit systems, standardize production and operation order, and lay a solid foundation for the healthy development of the steel industry.

The second is to strengthen the macro guidance role of policies, plans, and standards in the development of the steel industry. The management of the steel industry should fully leverage the fundamental role of market resource allocation, keep pace with the times, propose policies suitable for promoting productivity development under the new situation, strengthen the formulation, implementation, adjustment, and updating of steel industry policies, plans, and standards, in order to enhance the scientific, continuous, and timely guidance of the government's macro view, and promote the stable and healthy development of the industry.

The third is to strengthen upstream and downstream cooperation and expand new areas of industry management. During the 12th Five Year Plan period, the steel industry should enhance its service awareness, promote the transformation from steel producers to material service providers, and extend the management coverage of the steel industry downstream. It is necessary to strengthen the connection and coordination with downstream industry management departments, jointly promote the integrated development of upstream and downstream industries, and create a more competitive industrial chain.

　　20、 What are the requirements for external support conditions such as resources and energy for the development of the steel industry during the 12th Five Year Plan period?

The "Plan" predicts that the consumption of directional crude steel in China during the 12th Five Year Plan period will be 750 million tons, and specifies specific tasks for structural adjustment, resource guarantee, energy conservation and emission reduction in the steel industry. This puts higher demands on external support conditions such as iron ore, coking coal, ferroalloys, refractory materials, etc. Due to the dominance of long processes in China's steel production for a certain period of time, it is difficult to significantly increase scrap steel resources, and the iron steel ratio will remain relatively stable. Based on this, we expect that by the end of the 12th Five Year Plan, the demand for iron ore, coke, ferroalloys, and refractory materials in China's steel industry will be 1.13 billion tons, 380 million tons, 28 million tons, and 15 million tons, respectively.