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Governing Global ProductionChina and the Iron Ore War

Governing Global Production: China and the Iron Ore War [The rise of the Chinese steel industry proved transformative for the Asia-Pacific resource networks. From around 2000, the boom in Chinese steel production saw the Chinese steel mills eclipse the JSM to become the predominant steel industry (and iron ore importer) in the Asia-Pacific region. However, the arrival of Chinese steel mills did more than just shift the centre of gravity at the steel end of the resource networks. By adding large volumes of additional iron ore demand, and displacing the JSM from their leadership role on the steelmakers’ side, the rise of the Chinese steel industry also upset the delicate balance of market power that existed between the involved steel and mining firms. With the balance of market power thrown into disarray, a series of contests began over how, and in whose interests, the Asia-Pacific resource networks would now be governed. The opening move came from the Chinese government, which in 2005 launched a state-led strategy to establish a degree of Chinese control over the resource networks. This programme challenged the privileged position of many of the existing players, and elicited a set of counter-responses from affected firms and states that in turn moved to defend their positions in the face of the Chinese efforts. The result of these competing strategies was the outbreak of what one industry analyst dubbed the ‘iron ore war’ (Xie 2006).] http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png

Governing Global ProductionChina and the Iron Ore War

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Publisher
Palgrave Macmillan UK
Copyright
© Palgrave Macmillan, a division of Macmillan Publishers Limited 2013
ISBN
978-1-349-43809-9
Pages
150 –174
DOI
10.1057/9781137023193_8
Publisher site
See Chapter on Publisher Site

Abstract

[The rise of the Chinese steel industry proved transformative for the Asia-Pacific resource networks. From around 2000, the boom in Chinese steel production saw the Chinese steel mills eclipse the JSM to become the predominant steel industry (and iron ore importer) in the Asia-Pacific region. However, the arrival of Chinese steel mills did more than just shift the centre of gravity at the steel end of the resource networks. By adding large volumes of additional iron ore demand, and displacing the JSM from their leadership role on the steelmakers’ side, the rise of the Chinese steel industry also upset the delicate balance of market power that existed between the involved steel and mining firms. With the balance of market power thrown into disarray, a series of contests began over how, and in whose interests, the Asia-Pacific resource networks would now be governed. The opening move came from the Chinese government, which in 2005 launched a state-led strategy to establish a degree of Chinese control over the resource networks. This programme challenged the privileged position of many of the existing players, and elicited a set of counter-responses from affected firms and states that in turn moved to defend their positions in the face of the Chinese efforts. The result of these competing strategies was the outbreak of what one industry analyst dubbed the ‘iron ore war’ (Xie 2006).]

Published: Oct 16, 2015

Keywords: Market Power; Resource Network; Production Network; Australian Government; Spot Market

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