Whether it is state or internationally sponsored, increasing its domestic production is a limited option given China's power shortage. Its own generating capacity just simply isn't keeping up with demand and as a result, it is creating a very tight power market in China.
Mining exploration is very vulnerable to disruptions in power, as seen over 2008 where aluminum production in particular has suffered. There needs to be a structural change in the market. There is no quick solution and it will take a lot of long-term investment in order to build the power infrastructure that is needed to feed the economy. Until that happens, disruptions for metals producers are likely to remain a characteristic of the Chinese metals market going forward.
In addition, China is learning how to play on the free market where price, not policy, largely dictates company activity. There will always be some sort of government influence on these top resource companies but I think the structure of the companies will change; it will be in China's interest to privatize or commercialize some of these resources for their own flexibility. Another challenge for China is to undo the preconception that trading partners need to be cautious when doing business.
No one can blame China for wanting to control its own resource supply chain and with a number of its mining workforce gaining international expertise, its attempts to internationalize are well on the way. By playing by commercial principles instead of governmental policies, China is now showing that it is a powerful force to be reckoned with.
Henan Fote Heavy Machinery Co., Ltd.,the former Henan First Machinery Factory,founded in Henan Zhengzhou- China machinery manufacturing capital in 1982,is a large joint-stock company specialized in manufacturing heavy mining machinery and civilian machinery; it has six production bases with an area of 240,000 mÌ”, more than 2000 existing employees, 160,000 mÌ” standardized....Read More
Address: High and New Industrial Zone, Kexue Revenue, High and New Technology Industrial Development Zone, Zhengzhou, China