The objective economic environment is still one of the main factors affecting the reform process of China's steel industry. In the face of changing domestic and international market conditions, China's steel industry has achieved new breakthroughs in various fields such as capacity, layout and technology.

First, strictly control the increase in steel production capacity and improve the quality and level of existing stocks. While strictly controlling the steel industry's own production capacity, the coordinated adjustment between various industries has also effectively promoted the transformation and upgrading of China's steel industry. The 2018 government work report clearly stated that in 2018, the steel production capacity will be reduced by about 30 million tons, and the coal production capacity will be about 150 million tons, and the coal-fired power units of less than 300,000 kilowatts that are not up to standard will be eliminated or shut down.

Second, re-plan and build a rational layout of the Chinese steel industry. The structural differences between the eastern and western economies have also determined the non-equilibrium pattern of the east-west distribution of China's steel industry. With the fundamental changes in the economic conditions of the Chinese and foreign ministries, the Chinese steel industry has gradually ushered in an important opportunity for transformation and development. As far as the current situation is concerned, the distribution of production capacity in China's steel industry presents a significant pattern of “eastern and weak west”. 

However, with the development opportunity brought about by the “Belt and Road Initiative”, China will “solidly promote the comprehensive construction of the six economic cooperation corridors and a number of important strategic nodes at sea”. In view of this, in the future, the production capacity of China's steel industry should be more focused on the major areas involved in the “Belt and Road” and the transportation along the line. At the same time, considering the factors such as iron ore, coal and other resources directly related to steel production, Geographical advantages and convenient transportation conditions have created certain new competitive advantages for the development of the steel industry in the western region of China. In addition, the re-layout of production capacity does not mean simply eliminating backward production capacity, nor can it hinder the normal development of the steel industry. On the basis of comprehensive research, it is necessary to relocate the steel production capacity in geospatial space to achieve capacity and technology. The optimal combination of factors such as the market.

Third, strengthen internal and external coordination, promote international cooperation, and inject positive energy into the development of the steel industry. For the time being, the “One Belt and One Road” initiative, the coordinated development of Beijing-Tianjin-Hebei, and the Yangtze River Economic Belt have established the basic framework of China’s economic development strategy, and also transformed China’s economy from China and abroad from two different perspectives. The reform of the industry provides an important guarantee of motivation.

Fourth, actively introduce new technology concepts and effectively integrate the hard and soft resources of the steel industry. Since the reform and opening up, China's steel industry has been working hard on the hardware facilities, and has gradually narrowed the gap between the developed steel industry and the western developed steel industry. Some areas have even surpassed the development level of the developed western steel manufacturing industry. Highly impressive results. However, compared with the long-term progress of hardware facilities, the improvement of the soft conditions of China's steel industry has not achieved satisfactory results. Some backward development concepts and competitive conditions have even seriously hindered the overall reform of China's steel industry.