3.3 How has the location of the iron and steel industry in China changed over time?

The manufacturing system of the iron and steel industry Inputs Manufacturing processes Physical inputs 1 Raw materials, including coal, iron ore/scrap iron and steel, and limestone 2 Land Cultural inputs 1 Power supply 2 Capital 3 Labour 4 Technology 5 Transport 6 Government policies 7 Management 8 Market Iron ore/scrap iron and steel, coal and limestone Molten iron Slag Molten iron Rolling and shaping Iron making Steel making Casting Outputs Finished products (example) 1 Steel tubes and pipes 2 Steel sheets Waste 1 Hot water 2 Slag Cash Market

Socio-economic factors What are the factors affecting the location of iron and steel works? Socio-economic factors Government policies (offering grants and subsidies) Large capital Agglomeration (able to benefit from agglomeration economies) Advanced technology and innovation, dependent on automation Operation factors Raw materials: Iron ore/scrap iron and steel, coal and limestone Power: A large amount of coal Skilled labour Market: Large cities and industrial centres Management Clients (industries that use steel products) Site factors Extensive flat land Communication systems: By rail or by sea

Iron and steel industry is very important to China. How important is the iron and steel industry in China? The iron and steel industry is known as ‘the backbone of all industry’ as it provides basic _____________ for many other industries. raw materials Do you know what China’s rank in the world is in terms of steel production? Iron and steel industry is very important to China. A pile of steel bars

How important is the iron and steel industry in China? World total: 1,344 million tonnes China is the largest steel producer and consumer in the world. In 2007, it makes up about _____% of the global crude steel production. 36

How important is the iron and steel industry in China? Crude steel production in China, 1955-2007 In the 2000s, fast growth has taken place. Why do such changes occur? Before the 1980s, the production of crude steel was growing very slowly. After the 1980s, the growth has been speeding up. Source: China Statistical Yearbooks

What is the spatial distribution of the iron and steel industry in China? After decades of development, large numbers of iron and steel plants have been scattered over the country Many of the iron and steel firms are ( small / big ) and ( efficient / inefficient ) After several rounds of merging and regrouping, five major iron and steel centres have developed Major iron and steel centres in China

How has the location of China’s iron and steel industry changed over time? Since the 1950s, there have been two stages of development in the iron and steel industry in China. Stage 1: Inland shift of industries (early 1950s to late 1970s) Stage 2: Economic reform period (1980s and the early 2000s)

Why does Angang continue to operate at the same location? Why do some iron and steel plants remain in their original locations? Have you noticed which major iron and steel centre thrives throughout the period from the 1950s to present? Why does Angang continue to operate at the same location? Reasons: Building an iron and steel works is costly. ________ in Liaoning. Angang It would be a waste if the plant does not operate. Closing down the plant would cause unemployment and ( lower / higher ) tax revenue in the region. Industrial _______ inertia It would adversely affect other related industries.

How has the location of China’s iron and steel industry changed over time? To conclude … Will there be further changes in the location factors of the iron and steel industry?

Will there be further changes in the location factors? 1 Government policies During the two stages in the development of the iron and steel industry, the influence of the central government has been dominant. The influence of the _______________ has become more important. However, in recent years, the central control on industrial policies and planning has been reduced. economic market Local governments have tried to provide favourable policies to the iron and steel enterprises. They also help the enterprises in loaning and funding, land renting approvals and taxes.

Will there be further changes in the location factors? 2 Raw materials and power The production of iron ore and coal cannot meet the rapid growth of the industry. China has to rely on imported iron ore and coal because of shortage of raw materials and power. Shortage of power has caused temporary blackouts in many areas in east China.

Will there be further changes in the location factors? 3 Transport Low railway capacity has resulted in imported iron ore piling up in the main harbours. Rail transport (Credit: Panorama Stock Photo Co. Ltd.)

Will there be further changes in the location factors? 3 Transport All of the major iron and steel centres are located at or north of the Chang Jiang Transporting iron and steel products requires high transport costs Places south of the Chang Jiang are undergoing a fast pace of economic development

Will there be further changes in the location factors? 4 Market As economic development in Central and West China increases, there will be increasing demand for iron and steel products in these regions. Lanzhou, Gansu Province, a city in Central China (Credit: Tsui Chung Pong David)

Will there be further changes in the location factors? 5 Environmental concerns Coal is an important power resource for the iron and steel industry. Burning coal causes ____ pollution which, in turn leads to smog, acid rain and reduced visibility. It also emits carbon dioxide which intensifies ________________. The emission of dust from the iron and steel industry took up 15% of the total volume in China in 2007. air greenhouse effect The iron and steel industry is also the most serious source of ______ and _____________ pollution. water solid waste An iron and steel works in China (Credit: Nie Ming/FOTOE)

What are the location advantages of Caofeidian? Will there be further changes in the location factors? 5 Environmental concerns The air pollution caused by Shougang in Beijing is so serious that the central government has decided to move the production plant away. Beijing Caofeidian a deep, frost-free and silt-free harbour near large ports such as Tianjin Caofeidian What are the location advantages of Caofeidian? The present and new location of production plants of Shougang

Will there be further changes in the location factors? To conclude, what are the location factors affecting the future location of the iron and steel industry? A location which is: close to markets; with good transport networks; far away from the densely-populated urban areas.

Stage 1: Inland shift of industries (early 1950s to late 1970s) In this period, iron and steel works were mainly concentrated in the north-east, for example, _________. 1950s Anshan Anshan What were the major location factors of the iron and steel industry in China during this period? Why? Coalfields Major coal mines Iron ore Major iron and steel works Other iron and steel works

… and even to the West, e.g. Ürümqi Inland shift to the Central ... Stage 1: Inland shift of industries (early 1950s to late 1970s) What were the major location factors of the iron and steel industry in China in the 1970s? 1970s Coalfields Major coal mines Iron ore Major iron and steel works Other iron and steel works Can you give any examples of major iron and steel centres found in the Central? How did the distribution of the iron and steel works change during this period? … and even to the West, e.g. Ürümqi Anshan Baotou Taiyuan Wuhan Inland shift to the Central ... Panzhihua

Stage 1: Inland shift of industries (early 1950s to late 1970s) Government policies played a major role on the inland shift of the iron and steel industry. 3 Social reasons: 1 Strategic reasons: Moving the industries into the inland to safeguard them To achieve a more balanced economic development throughout the whole country The central government realized that the major threat of war was from Japan and the USA. Factories in the coastal areas could be easily attacked Inland shift of industries To relieve the problem of ______________ in the coastal regions overpopulation Locating near to iron ore fields: _______ _________-oriented 2 Economic reasons: raw To lower transport costs Raw materials: iron ore and limestone material Heavy and bulky Locating near to coal mines: _________-oriented Power resources: coal power

Stage 1: Inland shift of industries (early 1950s to late 1970s) Government policy is a particularly important location factor in China not only in this period but also in the later period. Do you know why? Most iron and steel plants are owned by the _______. Their locations have been subject to the changing priorities of the ________-planned economy during different periods. state state

Stage 2: Economic reform period (1980s to the early 2000s) How does the distribution of iron and steel works change during this period? What are the major location factors of the iron and steel industry in China nowadays? Can you name some of the major iron and steel centres? There is a general shift to the ________ regions. coastal Beijing Anshan Shanghai Wuhan

Have some regions developed first! Stage 2: Economic reform period (1980s to the early 2000s) 1 Government policies In 1978, Deng Xiao-ping adopted the _______ policy. open Have some regions developed first! Economic development has been concentrated in ________ areas coastal Deng Xiao-ping

Stage 2: Economic reform period (1980s to the early 2000s) 2 Technological advancements Less coal and iron ore are used Use of new furnaces Lower transport costs of power resources and raw materials Use of bulk carriers and better railway transport The location importance of _________________ and _____________ decreases power resources raw materials The location importance of ________ and __________　 _________ increases market coastal location

3 Favourable location factors in coastal regions A Well-developed infrastructure in coastal regions These facilities enable the easy ______ of raw materials and easy _______ of finished goods. N km Main railway line Line under construction Railway junction/Terminus import export Dense rail networks Good port facilities (Shekou Port, Shenzhen)

3 Favourable location factors in coastal regions B Existence of industrial centres What other favourable location factors do coastal regions have? ( Small / Big ) markets _______________ economies Agglomeration Abundant supply of __________ labour skilled

Can get land through ______________ 3 Favourable location factors in coastal regions C Sufficient supply of cooling water and extensive flat land ___________ flat land Extensive Water for _________ cooling Can get land through ______________ reclamation

Stage 2: Economic reform period (1980s to the early 2000s) 4 Problems of inland areas ( Small / Large ) population Poor transport networks and ( low / high ) accessibility Far away from major markets Problems in the inland areas discourage industrial development. ( Gentle / Rugged ) relief ( Mild / Extreme ) climate Mainly ( skilled / unskilled ) labour Uneconomical to exploit the inferior quality of coal and iron ore in inland regions