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Baosteel funds e-commerce steel trading center in Shanghai
Aggregated Source: Shanghai Daily: Business

BAOSTEEL Group's funding of the Shanghai Iron and Steel Trade Center, a new electronic trading platform, underscores Shanghai's effort to reorient its economy to be more service focused.

The center, launched in late May, is 90 percent funded by Baosteel. The trading platform will help cut trading costs for the industry, which is now facing overcapacity and tiny margins, officials have said. It also provides supply-chain financing, warehousing and logistics, as well as consulting services.

The center is part of Baosteel's plan to transform itself from a manufacturer to a service provider, hoping to use e-commerce as a new driver of growth to counter the economic slowdown and industry overcapacity. Chairman Xu Lejiang has called such transformation a "global trend."

Shanghai-based Baosteel is the parent of China's largest listed steel maker.

The transformation is also a mark of Shanghai's economic restructuring -- a shift away from high energy-consuming and labor-intensive industries.

In the first half of this year, the industrial output of Shanghai's tertiary industries, or the service sector, rose 10 percent, according to initial official estimates. The tertiary industries account for more than 60 percent of the local economy.

Baosteel is moving 30 percent of its steelmaking capacity out of Shanghai to help the city adjust its growth patterns.

Still, steel trading will remain crucial to Shanghai's economy. The new center also aims to create a "Shanghai price" and "Shanghai standard" for the steel industry, a spokesman said.

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Copyright Shanghai Daily: Business