Baoshan Iron & Steel Co. Ltd. (Baosteel), the country's largest steel mill, said it would cut prices starting in October. Other mills are expected to follow.

Baosteel said on August 25 that it would slash the price of its cold-rolled steel products by 300 yuan ($44) per ton. It also will cut prices for galvanized sheet products by 100 yuan ($15) per ton, hot-rolled pickled steel products by 300 yuan ($44), and galvanized fingerprint-resistant sheet products by 400 yuan ($59). Despite the price cuts, Baosteel's prices will remain higher than those of other mills, because its products are of higher quality.

Analysts said the country's excessive steel supply and weak demand prompted the price cuts. Chen Kexin, an analyst at Bsteel.com.cn, an online steel industry consultancy, said in a report that steel makers would likely keep their prices down because major steel-consuming industries, such as building construction and auto manufacturing, showed signs of a slowdown.

Chen said the global economic downturn also had led to shrinking steel demand on the international market, which has forced domestic producers to lower their prices. China has been a net steel exporter since 2006.

Stock Market Woes

Investors dumped shares on the mainland stock markets, which have fallen for 10 consecutive months, making the country's domestic A-share markets the worst-performing ones in the world.

Globally, U.S. markets have picked up momentum as crude oil prices have started falling. Crude oil futures climbed to a record high of $147 a barrel in July, but have been dropping ever since.

Meanwhile, mainland markets have continued to fall to a 20-month low with the benchmark Shanghai Composite Index dangling at around 2,300 points. The index had hit a record high of 6,124 points on October 16, 2007, but plunged to 2,284 points this August 19.

Analysts cited several reasons for the heavy losses, including greater selling pressure caused by a huge number of non-tradable shares being made tradable, weakening market sentiment, the outflow of hot money and stricter government supervision of the financial sector.

The average share price of companies listed on mainland stock markets has dropped to around 8.2 yuan ($1.2), down from the peak price of 20 yuan ($3) in July 2007.

Shrinking Profits

China's listed companies saw their profits slow down in the first half of this year, largely because of state macro-control policies and losses from stock trading.

Listed companies' profits grew less than half as fast in the first half of 2008 as they did during the same period a year earlier, according to a report in Shanghai Securities News on August 26. It said as of August 25, 1,178 listed companies, or 73 percent of the total, had released their preliminary results for the first half of the year. These reports showed the companies earned a total of 323 billion yuan ($47 billion), up 31 percent year on year. The year-earlier growth rate was 70 percent.

The companies' revenues grew 28 percent to 3 trillion yuan ($440 billion), but operating cash flow contracted sharply, falling 60 percent to 413 billion yuan ($60 billion).

The newspaper report said profits had been affected by a global economic slowdown and a weak domestic stock market, while last year's results had been boosted by a bullish equity market. The stock market has declined by more than half since it peaked last fall.

For instance, PetroChina Co. Ltd., the country's largest oil producer, posted a 34.5-percent profit decline in the first half compared with the year-earlier period.

Although more than 20 percent of listed companies have yet to release their half-year results, analysts said overall corporate profit growth would likely fall between 20 percent and 30 percent.

Tourism in Poor Regions

The government plans to invest heavily in exploring the tourism potential of some of the country's less-developed regions in a bid to bridge the rich-poor gap between thriving regions and underdeveloped ones.

The National Development and Reform Commission, along with the National Tourism Administration and four other Central Government departments, issued a joint statement on August 27, saying they would take a number of measures to boost the nation's tourism market with a special focus on the less-developed western and central parts of the country and the old industrial bases in the northeastern provinces.

The statement said the government is considering the introduction of tax incentives and subsidized micro-credit loans for companies to develop tourism services and facilities and train professionals.

Xinhua News Agency reported that domestic tourists spent 778 billion yuan ($114 billion) last year, up 47 percent from 2005. Spending by urban residents increased by 51.8 percent to 555 billion yuan ($81 billion), while spending by rural residents rose 36.2 percent to 222 billion yuan ($33 billion).