tinue to refer to the production statistics reported in the 1950's, and any attempt to reconstruct Chinese series must take these figures into account. Practically no statistical information on the economy, including the iron and steel industry, was released in the 1960's. Since 1970, the Chinese have announced a few national statistics for steel which have helped to clarify general trends in the industry. This paper describes the development in the industry since 1959 and provides a number of statistical series. It also discusses problems the Chinese have in expanding and modernizing the industry and the alternatives available for solving these problems. Because raw material problems are particularly significant, we have devoted the first section to their discussion. After a historical section, we then discuss the main components of steel production and the problems of balanced growth. Comments on prospects for the next few years complete the main text. An appendix describes the principal iron and steel plants in China. Abbreviations used in the footnotes in this paper are: The People's Republic of China has large resources of the basic raw materials needed to become one of the world's largest steel producers. Coal, iron ore, and limestone are found in widespread areas the only deficit area being southeast China. Large deposits of important alloying materials-manganese, molybdenum, vanadium, and tungstenalso are available (see figure 1 for the distribution of major resources). Resource weaknesses include the inferior quality of much of the coal and iron ore and the dependence on imports for a large part of requirements for cobalt, chromium, nickel, and steel scrap. Organizational and technological weaknesses have exacerbated China's resource problems. In the 1950's, in their haste to increase production rapidly, the Chinese failed to survey potential resources fully and major plants were built in areas where resources were scarce. For example, the large plant at Pao-t'ou was built at a location far away from suitable supplies of coal. Inefficient organization and management led to waste of resources and capital. Some sectors of the industry grew slower than others, causing severe bottlenecks. Ore beneficiation in particular was neglected despite the poor grade of Chinese ores. Shortages of iron ore held back production of pig iron and the poor quality affected efficiency of operations. And, delays in completion of steel finishing facilities postponed full utilization of steel production capacity. Iron Ore The PRC has large deposits of low-grade iron ore and a few small deposits of high-grade ore. No precise quantification of these deposits, based on an objective up-to-date survey, is available. Published figures range from the pre-1949 estimate of 2 billion tons to the fantastic claim of 100 billion tons made by the Chinese during the Great Leap Forward. In any event, reserves are sufficient for continued exploitation well into the 21st century. Nearly all the major iron mining areas are located north of the Yang-tse. Deposits now being worked include those surrounding the An-shan Iron and Steel Plant in Liaoning, the mines northwest of Peking, the mines in the Pai-yun-o-po area north of Pao-t'ou, and the mines near Ta-yeh and Ma-an-shan in the Yang-tse valley. Numerous other iron ore deposits exist; the potential output from ore bodies in Kansu, Kweichow, southern Szechwan, and Kwangtung is especially great. Vast areas in China's hinterland have not been surveyed for mineral resources of any type. Even if rich iron discoveries were made in the near future, several years and generous doses of capital would be needed before the industry would benefit. Since 1952, the average grade of China's domestically mined iron ore has generally fallen. The industry has had to turn increasingly to deposits of low grade ore in order to increase production. During years of normal growth, Peking has emphasized exploitation of high-grade ore deposits and the average iron content has usually run over 40 percent. This appears to have been the case during the rehabilitation period of the early fifties and the retrenchment period of the early sixties. In times of rapid expansion-for example, the Leap Forward (1958-60) and the early 1970's-the average grade falls well below 40 percent iron content. Table 1 provides details. 1949-56-State Statistical Bureau, People's Republic of China, "Major Aspects of the Chinese Economy Through 1956," Peking, pp. 14, 26 (translation). 1957-58-Calculated from increases of 30 and 100 times over 1949 as reported in JPRS 3754, Aug. 25, 1960, p. 3. 1960-Based on 10-mo. figure reported in FBIS, Dec. 15, 1960, p. BBB5 (NCNA, Peking, Dec. 13, 1960). 1970 Increase of 26.1 percent for 1971 over 1970 (FBIS 1, Jan. 3, 1972, p. B10-NCNA, Peking, Dec. 31, 1971). 1971-Based on 1st quarter report that production in 1972 increased by 13.5 percent over 1971 (FBIS 1, May 2, 1972, p. B11-NCNA, Peking, May 1, 1971). This figure seemed reasonable in light of increase in pig iron production of 12 percent for 1972. 1972-Production was 2.7 times as great as 1965 (CMP-SCMP-73-38, Sept. 1973-NCNA, Peking, Sept. 6, 1973). 2 Information for production from large mines was derived as follows: 1949, 1955-56-It was assumed that production figures reported in Yen-Chin Pao, Peking, Oct. 10, 1957, pp. 6-8 were for large plants only. 1957-Estimated that large plants accounted for 80 percent of total production, about the same as that for 1955-56. 1958-Production at large plants increased by 90 percent (SCMP No. 1949, Feb. 5, 1959, p. 8--NCNA, Peking, Jan. 30, 1959). 1959, 1969-71-Residual. 1960-Production at large mines increased by in 1st 10 mo (FBIS, Dec. 15, 1960, p. BBB5-NCNA, Peking, Dec. 13, 1960). 3 Information for small plants was derived as follows: 1949, 1955-58, 1960-Residual. 1959-Chou En-lai reported that small mines produced 20,000,000 tons of ore in the 1st half of 1959 (SCMP No. 2100, Sept. 22, 1959, p. 17). 1969-Output was 4 times as great in 1971 as in 1969 (FBIS 1, Sept. 29, 1972, p. B10-NCNA, Peking, Sept. 28, 1972). 1970-Local mines produced of the nations total output (FBIS 1, Sept. 28, 1971, pp. B2-4-NCNA, Sept. 27, 1971). 1971-Output was 40 percent above 1970 (FBIS 1, Jan. 3, 1972, p. B10-NCNA, Peking, Dec. 31, 1971). Approximately 2 tons of standard grade (55 percent iron content) ore are required to produce 1 ton of pig iron (1.82 plus about 10 percent for loss). $ See table 6. The sum of cols. 4 and 5. It is assumed that ore exported and imported is at standard grade. 7 Except for 1965 where the figure is assumed, the grade is calculated by dividing total requirements of 55 percent standard ore by actual production and multiplying by 0.55. Coking Coal No information is available on the size of China's resources of coking coal. Huge deposits of bituminous coal consist mainly of gas coal and weak coking coal. Only small amounts of good quality coking coal are available.1 China's coking coal resources lie mainly in North and Northeast China. Three of the major coking coal centers in the country-Fushun, Hao-kang, and Kai-luan-were developed before 1949. Newly expanded mines that produce sizable quantities of coking coal include the Huai-nan Mine in Anhwei and the Ping-ting-shan Mine in Honan. Some coking coal is produced in Southwest China near Chungking and in eastern Yunnan and western Kweichow. The Shih-tsui-shan mine in Ninghsia Autonomous Region is the major coking coal center in Northwest China. Only small amounts of coking coal are available in the coal-rich provinces of Shansi and Shensi. All types of coal are in short supply in Southeast China. According to a Soviet study of 1959, only 2.6 percent of the explored coking coal seams produced coal that could be readily beneficiated, and coal from 81.6 percent of the seams was difficult or very difficult to beneficiate. The ash content of 80 percent of the seams was above 15 percent. The sulfur content of 50 percent of the seams was above 1 percent. Ordinarily sulfur content should be 114 percent or less and ash content 8 percent or less for a good coking coal. Three-fourths of the coal used for coking in 1958 consisted of gas coal or weak coking coal.2 China has claimed significant breakthroughs in the use of anthracite and local coals in the production of steel. For example, the Pao-t'ou Steel Plant got its coal from as far as 1,000 miles away until means of using local coals (both bituminous and anthracite) were developed. Among the processes to reduce gas content and increase the mechanical strength of coke are selective processing, blending, the introduction of additives, and rapid preheating. In some cases, the portion of coking coal is said to have been reduced to 20 percent. The use of mixed types of coal for coking, it is claimed, has doubled China's coal resources for making coke. Despite these claims, China has been unwilling or unable to export coking coal to Japan in recent years. The continued launching of campaigns to substitute local coal for coking coal in the chemical and steel industries also indicate that severe shortages of coking coal still exist. 1 See JPRS 5642, Oct. 13, 1960, pp. 28-62 for a description of the quality of China's coal (article by Wang Yin-jen). 2 JPRS: 14, 738, Aug. 6, 1962, The Coal Industry of the People's Republic of China, pp. 94-100. 3 See JPRS: 32.205, Sept. 20, 1965, pp. 10-11, JPRS: 29.968, May 7, 1965, pp. 9-13, JPRS: 31,340, July 30, 1965, pp. 14-15 and JPRS: 33,283, Dec. 13, 1965. |