On March 30th Baosteel, China's biggest producer, reported its first quarterly drop in net profits in more than three years.

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Other visits to Baosteel and Volkswagen gave most of these students their first exposure to what a large manufacturing plant looks like.

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Xie Qihua, the president of Baosteel, saw her company's profitability drastically reduced in the mid-1990s when the government forced her to absorb four rival loss-making steel producers.

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Baosteel, the country's biggest producer, has said it will cut prices for its main products by 10% in the first quarter of 2006, because of a nationwide glut.

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Baosteel is down 5.77 percent year to date.

FORBES: Baosteel Closes Shanghai Factory

Baosteel was the first steel producer to announce the closure of a mill while others have kept mills operating at low capacity, buoyed by loans and subsidies from local governments that want to avoid losing jobs.

FORBES: Baosteel Closes Shanghai Factory

But since the biggest Chinese steelmaker, Baosteel, had only a 6% share of its home market (Nippon Steel, by contrast, controlled a third of the Japanese market), it lacked the bargaining power for negotiations behind closed doors.

ECONOMIST: Iron ore