A timely move reverses Qianxi's fortunes

As well as slashing capacity, more importantly they have been shifting their emphasis to high value-added products, especially those being produced for emerging sectors.

By the end of last year, Qianxi had cut its capacity for powdered iron by 10 million tons and invested 3 billion yuan in powder metallurgy－a term covering a range of activities in which sometimes unique new types of materials or components are made from metal powders.

Alloy powder, for instance, can be used for the aerospace industry, precision instruments and automotive electronics.

Hebei Jinxi Iron & Steel Group is one of the province's biggest steelmakers and has seen a dramatic transformation in how it operates, said its Chairman Han Jingyuan.

It made huge investment upgrading its product mix, a move which is already yielding good profits, said Han.

Watching his rolling mills turn freshly made steel billets into sheets, he smiled proudly.

"It is this type of new steel product that is bringing Jinxi back to life, and profit."

The company is now also making H-shaped steel, an efficient type of structural steel used for beams in buildings and other structures, a market which is still enjoying strong demand.

In the first two months of this year, Jinxi generated a total profit of 200 million yuan.

Such high value-added steel products, said Bai Chunming, now account for a third of steel output in Qianxi, which means the county is no longer so dominated by the traditional iron and steel industry.

Nearly 70 of its steel companies have also invested in other industries such as tourism, modern agriculture and green emerging industries.

"We managed to help many of them retreat from loss-making activities, well before they hit crisis point," Bai said.

Jinxin Group was one of the county's biggest iron ore mining companies, producing a tenth of Qianxi's powdered iron.

"All we did for years was dig out the iron ore, crush it and sell it," said Gu Lianchun, its chairman.

"It was just rough processing with little technology, and as iron ore is a non-renewable resource, our operation had become unsustainable," Gu said.

But as the clouds of the global economic crisis gathered in 2008, the company started investing in sustainable and green industries, such as reprocessing waste wood into chipboard.

It also moved into the photovoltaic sector.

"The transition from resources-intensive industry to technology-intensive industry has been our way out," Gu said.

This year, Bai said that more than 300 projects linked with emerging industries will be started by companies in Qianxi.

"So you see, as the steel industry shrank, it certainly didn't hold back the county's economy."

"On the contrary, we are now seeing robust growth."

Over the past five, figures showed Qianxi's GDP still grew 9.5 percent on average.

But its steel industry certainly didn't die.

The county is now trying to develop its own steel-consuming industries to create demand for its strongest producers that survived the downturn.

"We have started developing a modern equipment manufacturing industry, for instance, that's going to use steel products we make right here," Bai said.