Zhang Fei sums up one of the headaches for China’s Premier Li Keqiang in his efforts to refocus the country’s economy.
The 40 year-old contractor, who’d just earned 160 yuan ($26) for four hours work at a local steel mill, is leaning on his red motorcycle in grimy army fatigues and battered running shoes on Galaxy Street. That’s a 10-mile strip lined with forges, welders, tire repair and auto-painting shops, as well as restaurants, a school and a hospital.
After a decade of failed efforts to cut outdated commodity capacity in China, Goldman Sachs Group Inc. says Li is getting serious, driven by the need to reduce severe pollution. Zhang and thousands like him on Galaxy Street live off servicing mills in Tangshan, the largest steel city in China that alone has almost five times as many blast furnaces as North America.