China to push fewer and stronger car and steel makers

China will concentrate more power in the hands of fewer auto and steel companies, the government has said in unveiling its most concrete plans yet for reform of the two industries.

The State Council or cabinet said it would push five steel makers and two or three car companies to take dominant positions in their respective industries. The cabinet, in statements posted on the government website www.gov.cn late on Mar 20th also named which companies China would encourage to lead the consolidation.

Among carmakers, China called on FAW, Dongfeng, Shanghai Automotive Industry Corp and Changan to make acquisitions nationwide.

It said that Beijing Automotive Industry, Guangzhou Automobile Group, Chery Automobile and China National Heavy Duty Truck should spearhead regional efforts. In steel, Baosteel Group, parent of Baoshan, Anben Iron and Steel and Wuhan Iron and Steel were tapped to be the three biggest players, producing 50 million tonnes or more a year.

Overall, it said that more than 45% of steel output in China, the world's biggest steel producer, should come from the top five companies.

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