Furnaces burn on as Beijing tries to cool the economy
Dressed in a shabby Mao suit covered with singe marks from flying sparks, the security guard insisted that the steel plant had been shut down. But after a little cajoling, he allowed some visitors in for a quick look around and approaching the furnace, he put his hands up close.
"See, it is still hot," he said, flashing a toothless smile. "We are supposed to be closed - but we work at night instead of during the day."
On the outskirts of Tangshan, east of Beijing, the small plant is a primitive operation that takes cheap steel slabs and turns them into H-bars - long, thin rods used in construction. Belching out smoke and spilling untreated waste water, it is just the sort of place Beijing says it wants to shut. But with local officials turning a blind eye, business is going on as usual - once the sun has gone down.
Steel is the backbone of China's booming economy. It produces three times as much as Japan, the second-placed country, and output has doubled over the last five years. Working out just how much steel there is in China is a constant headache for industry executives.
Yet China's semi-legal plants also have much broader implications for the economy. They raise the question of whether China is overinvesting. They also challenge the idea that bureaucrats in Beijing still have the ability to direct the economy as it becomes ever more complex and privately owned.
A few years ago, that Tangshan street boasted not much more than a scrapyard for old machines. But now there is an endless line of small chimneys that indicate new steel facilities - most of them private - which have helped turn the city into the biggest steel producer in the country. Some plants process steel for use in construction and manufacturing, while others turn any iron ore they can get hold of into rudimentary forms of steel bars.
During Mao's Great Leap Forward in the 1950s, millions of individuals set up basic furnaces in their backyards to forge steel. Now thousands of small entrepreneurs, with an eye on profits rather than politics, are building facilities that are not much more sophisticated. The private sector accounts for one-third of the industry's output. The Tangshan plant is run by a husband-and-wife team who arrived in a new, black BMW: it was paid for by another family business that makes machines to slice meat.
Last year the industry association conducted a survey of production capacity that included these new small producers. It concluded that there was actually 50m tonnes more steel capacity than most analysts had predicted - equivalent to more than half the annual production of the US, the third biggest steel producer.
Unlicensed plants such as this have led some analysts to conclude China is creating an unsustainable investment bubble. This perception has been amplified by recent government figures showing that fixed-asset investment has been increasing by an astonishing 30 per cent a year. From these numbers, it would seem that steel is not alone in witnessing an investment binge.
According to Stephen Roach, chief economist at Morgan Stanley: "In China today rapid economic growth seems in danger of veering out of control." Even Wen Jiabao, prime minister, admitted last week that the economy was in danger of "overheating".
Yet not everyone is convinced. Some economists point out that the way the fixed-asset investment data are calculated means they are exaggerated. ("Stop using this number," urges Jonathan Anderson, economist at UBS.) Moreover, China is witnessing modest inflation - not the rampant deflation that would result from overcapacity.
The steel industry numbers are equally inconclusive. Prices and profits slid in the second half of last year, suggesting that overcapacity was hitting hard. But in the first half of this year they recovered strongly, only to drop back in recent weeks.
Trade might provide the answer to why the suffering has not been greater. China moved last year from being a massive importer of steel to being a modest net exporter - providing a temporary escape valve for domestic producers.
Peter Marcus, an industry consultant at World Steel Dynamics, reckons that by 2010 steel production in China will outstrip demand by 63m tonnes.
The Tangshan steel plant raises the further issue of how the government manages the economy. In most countries, if a central bank were worried about overcapacity, it would use monetary policy to try to slow investment. China has made a start, raising rates once, with another increase widely predicted.
But in China, the formal financial sector provides only 20 per cent of investment funds, so a sharp boost in interest rates might not have much impact. Instead, Beijing still has an army of bureaucrats who want to use "administrative measures" - new rules, approvals, warnings - to mould economic behaviour. Yet with the private sector growing and the economy becoming more diverse, it becomes harder to make these planning tools work.
In 2004, the government introduced a raft of measures to slow the economy and paid special attention to the steel sector. Managers at one unapproved steel plant near Shanghai were arrested. But over the next year, the industry expanded output by 69m tonnes - equivalent to the entire industries of South Korea and India, says CLSA, an investment bank.
Over the last year, the government has announced a series of initiatives to close small steel mills, in an effort to streamline capacity and limit environmental damage.
In the Tangshan area, the authorities have indeed forced some small plants to shut. But many have continued. The provincial government ordered that the night-shift plant be closed but the district government has not enforced the order.
"The central government finds it very hard to close these small steel mills," says Xu Zhongbo, an industry consultant in Beijing. "They are often in poorer areas and are big contributors to local government."
Local officials across the country are judged almost entirely on the economic growth they produce, making jobs more important than clean air. China is governed by a form of authoritarianism but it is a decentralised one. Beijing's writ has its limits.
Geoff Dyer
新时代的“大炼钢铁”
这
位保安穿着一身破旧的毛式中山装，上面满是飞溅的火星带来的焦痕。他坚持表示，这个钢铁厂已经关闭。但在我们说了几句好话之后，他同意让一些参观者进厂看两眼，并可以靠近冶炼炉。随后，他道出了实情。
“瞧，还是热的，”他抿嘴一笑，“我们本该关掉的，不过我们在晚上开工，而不是白天。”
这座小钢铁厂坐落于北京以东的唐山郊区，它利用廉价钢锭进行粗陋的加工，从而生产出又长又薄的建筑用H型钢。它的烟囱里冒着浓烟，未经处理的污水直接排出――这正是中国政府希望关闭的那类钢铁厂。但由于地方官员睁一只眼闭一只眼，因此，只要太阳落了山，这里的生产就一切照旧。
在蓬勃发展的中国经济中，钢铁行业是其支柱产业。过去5年，中国的钢产量翻了一番，现在的产量已是全球第二大钢铁生产国日本的3倍。对于业内高管来说，仅仅是计算中国钢产量的问题，就已经令他们头疼不已。
然而，中国那些半地下的钢铁厂对经济的影响更大。它们引发了中国是否出现投资过热的问题，同时，也挑战着这样一个看法：尽管中国经济变得更为复杂和私有化，中国政府官员们仍有能力管理经济。
几年前，唐山的那条街道不过就是废旧机器的垃圾场。但如今，这里竖立起无数的小烟囱，代表着一个个新建的钢铁厂，它们帮助唐山成为中国最大的钢材生产基地，而其中多数为私有企业。一些钢铁厂生产用于建筑业和制造业的钢材，而其它厂则把它们通过各种方式得到的铁矿石加工成初级的钢条。
在上世纪50年代毛泽东发起的大跃进时期，成百上千万人在自家后院架起了原始冶炼炉，用来炼制钢铁。如今，成千上万家小企业为了追逐利润，而非出于政治目的，正在兴建比当年的土高炉先进不了多少的炼钢设施。私营钢铁企业的产量占全行业总产出的三分之一。这家唐山钢铁厂就是一个夫妻店，他们来到工厂时开着一辆全新的黑色宝马(BMW)，而这部车也是一家生产切肉机的家族企业送给他们用于抵偿钢材货款的。
钢铁行业协会去年进行了一次产能调查，调查范围包括这些新兴的小厂商。调查结果显示，中国的钢铁产能比多数分析师的预期整整高出5000万吨，相当于全球第三大钢铁生产国美国一半以上的年产能。
诸如此类未经许可的钢铁厂令一些分析师作出结论：中国正在产生不可持续的投资泡沫。中国政府最近发布的数据加深了人们的这种感觉。该数据显示，中国固定资产投资的年增速达到惊人的30%。从这些数据可以看出，钢铁产业并非唯一出现投资过度的行业。
摩根士丹利(Morgan Stanley)首席经济学家斯蒂芬?罗奇(Stephen Roach)表示：“在今日中国，经济的迅速增长似乎面临脱缰的危险。”甚至温家宝总理上周亦承认，经济面临“过热”危险。
然而，并非人人都这么认为。一些经济学家指出，从固定资产投资数据的计算方式看，数据有所夸大。瑞银集团(UBS)经济师乔纳森?安德森(Jonathan Anderson)就呼吁“停止使用这一数据”。此外，中国正在经历适度的通胀，而非产能过剩可能导致的严重通缩。
钢铁行业的数据同样缺乏说服力。去年下半年，钢铁价格和企业利润双双下滑，显示出产能过剩带来沉重打击。但今年上半年，价格和利润又出现强劲回升，仅在最近几周才有所回落。
为什么一直没有出现更大的打击？人们从贸易数据中或许能够找到答案。去年，中国从一个钢铁进口大国转变为数量温和的净出口国，为国内生产商提供了临时的“减压阀”。
世界钢铁动态(World Steel Dynamics)的行业咨询师彼得?马库斯(Peter Marcus)推测，到2010年，中国钢铁产量将比需求量高出6300万吨。
这家唐山钢铁厂引发了更为深远的问题，即政府如何管理经济。在大多数国家，央行如果担心产能过剩，可能会利用货币政策令投资放缓。中国已经启用了货币政策，上调了一次利率，而且市场普遍预测还会再一次加息。
但在中国，投资资金仅有20%来自正规金融部门，因此，大幅推高利率可能不会有太大效果。此外，中国政府中仍存在大批官僚主义者，他们希望运用“行政措施”左右经济行为，比如新的规定、行政许可、行政警告等。不过，随着私营经济发展壮大，以及国民经济日趋多样化，这些计划经济工具越来越难以生效。
2004年，中国政府采取了大量放缓经济增速的措施，并对钢铁行业加以特别关注。当局还逮捕了上海附近一家未经审批的钢铁厂的管理人员。但里昂证券亚洲分部(CLSA)表示，第二年，该行业的产量就增加了6900万吨，相当于韩国和印度整个钢铁行业的总产量。
去年，中国政府宣布了一系列关闭小型钢厂的举措，力图精简产能，减少对环境的破坏。
在唐山地区，当局确已强迫一些小工厂停业，但很多工厂仍在继续生产。省级政府下令关闭夜班工厂，但下一级政府并未执行上级命令。
“中央政府发现很难关闭这些小型钢厂，”北京的行业咨询师许中波表示，“它们往往位于贫困地区，是当地政府的重要收入来源。”
全国各地地方官员的政绩评估，几乎完全取决于他们创造的经济增长，这就使得增加就业比清洁空气更重要。中国奉行中央集权主义统治方式，但事实上权力非常分散。即使是中央政府的政令也有管不到的地方。
