Happy New Year from Hong Kong, where most things are still closed. The city, which was one of the first outside of mainland China to react to the initial outbreak, has now lived with the threat of the virus for almost a year.
The focus of today’s main piece tracks back to the mainland and looks at how Covid-19 has affected Beijing’s dominance of the global steel industry.
Meanwhile, Policy watch focuses on Erika Solomon’s and Guy Chazan’s dissection of how Germany’s relationship with China could be redrawn in the post-Merkel era.
When news of a virus in Wuhan, China, first swept the world in early 2020, few would have imagined that the ensuing crisis would increase rather than stymie the country’s dominance of core industries.
One sector that lays bare that process particularly clearly is steel.
In the period to the end of November, China’s share of global production was 57.5 per cent, according to a MySteel analysis of data from the World Steel Association. That compares with 53.3 per cent in all of 2019.
Production in China was up over that period, compared with a year earlier, to almost 1bn tonnes, while total global production fell. In China, new reported cases of the virus slowed to a trickle in the second half of the year, while the pandemic continued to (and continues to) rage in other major economies.
China’s economic response to the pandemic — which involved issuance of special bonds designed to fund infrastructure projects, in an echo of its post-financial crisis stimulus strategy — ramped up the need for steel. Demand was also bolstered by a construction boom as house prices soared.
