HKDSE Geography/M3/China's Iron and Steel Industry 1980s-2000s

The general trend was returning to the coastal regions, with developments in major cities such as Beijing, Tianjin and Shanghai.

Technological Development

Thanks to technological development, electrical furnaces were developed. They can accept scrap iron and steel, so there is no need to use blast furnaces to make pig iron any more. More energy is saved.

Also, technological advancements in transport has contributed to the coastal shift in the 1980s. Use of bulk carriers and advancements in rail transport reduced transport costs of heavy and bulky materials. Consequently, the iron and steel industry became less bound by raw material and power oriented sites.

Locational Factors

• Land: The coastal regions can provide sufficient coastal flat land for expansion of the iron and steel industry.
• Labour: The coastal regions can provide sufficient labour for the expansion of the iron and steel industry as they are near to large urban centres.
• Capital: The coastal regions can provide sufficient foreign investment for the expansion of the iron and steel industry thanks to government policy.
• Market: The coastal regions have important steel-consuming industries like car manufacturing and construction, which demand a huge amount of steel. They are also an important source of scrap iron and steel. Moreover the rapid growth in population and economic activities in coastal regions have created a greater demand for iron and steel products including construction materials, electrical appliances and private cars. This forms a large market for iron and steel products.
• Government: The Chinese government, after the Open Door Policy in 1978, is actively developing coastal cities as industrial centres, and is planning to expand, regroup and modernise the steel companies. The adoption of the policy of "having some regions developed first" also fostered industrial development in coastal regions since coastal regions with a more advanced economy were chosen to be developed first.
• Transport: Ports along the coast facilitate the import of raw materials and export of final products.