2020 “Yinhua Fund Cup” Sina bank financial planner competition, hot registration. From now on to September 7, you will receive free gift packages worth more than 700 yuan from Guan Qingyou, Luo Yuanshang, Chen Kaifeng and Jian Qi. In the late evening of August 20, a middle-level cadre of China Baowu iron and Steel Group (hereinafter referred to as China Baowu) released a picture with the words “Matthew effect” on wechat friends circle. < p > < p > the next day, he attended the signing ceremony of China Baowu group’s reorganization of Taigang group. After the ceremony, the state owned assets supervision and Administration Commission of Shanxi Province will formally transfer 51% of the equity of Taigang group to Baowu, China. < p > < p > originated from the “Matthew effect” of the Bible, it has the meaning that the stronger the stronger and the winner takes all. Under the background of China Baowu reorganizing Taigang group, the four words “Matthew effect” have new meanings in the domestic steel industry. The word “Tai” in “Matthew effect” corresponds to TISCO group, while the word Ma refers to another steel enterprise, Masteel group. A year ago, China Baowu reorganized Masteel group in a similar way. The state owned assets supervision and Administration Commission of Anhui Province, the former actual controller, transferred 51% of the shares of Masteel group to Baowu of China without compensation, and retired to the second largest shareholder. < p > < p > through two reorganizations of local state-owned enterprises, Baowu of China has been able to realize its plan of “100 million tons of Baowu”. Baowu has been planning to increase its crude steel production capacity to 100 million tons. This is equivalent to one tenth of China’s crude steel output last year. < p > < p > the reorganized Masteel group and Taigang group of Baowu Institute of China have 20 million tons of steel production capacity and 10 million tons of steel production capacity respectively. In addition, during the period, they obtained the substantial management right of Chongqing Iron and Steel Co., Ltd., and Baowu group of China successfully exceeded 100 million tons, ranking among the world’s largest steel producers. Its production capacity of Yaowu Steel Group is the second largest in China’s steel industry. As for the continuous merger and reorganization of the company, Chen Derong, chairman of Baowu, once explained that it was a market-oriented development behavior based on the understanding of supply side structural reform and the steel industry. Baowu of China has the demand of merger and reorganization, and other enterprises also have such demand. The reorganization brings win-win situation for both sides. < p > < p > China Baowu itself is the product of merger and reorganization. In 2016, due to the serious overcapacity and large-scale loss of domestic steel enterprises, Baosteel Group and WISCO group carried out joint restructuring, and Baowu of China was born. < / P > < p > in the same year, the adjustment and upgrading plan for the iron and steel industry issued by the Ministry of industry and information technology sets a blueprint for the development of the steel industry in the next five years: by 2020, the industrial concentration of the top 10 enterprises in the domestic iron and steel industry will increase from 34% to 60%. China Baowu is clearly the most determined practitioner of this plan. However, Chen Derong, the helmsman of Baowu in China, knows that the scale of production capacity is only a means, not the ultimate goal. At an internal meeting of China Baowu attended by interface news reporters, Chen Derong once asked himself, “what is the value of our pursuit of” 100 million tons of Baowu ” Chen Derong’s answer is that “100 million tons of Baowu” can bring us specialized division of labor and improve efficiency. According to his assumption, if the diversified supporting business of 10 or even 20 steel mills is integrated, it can become a huge industry. In the past, when there was only one steel plant, no matter how integrated the auxiliary processes of iron and steel production could not produce efficiency. < / P > < p > it is also important that after the expansion of production capacity, China Baowu will gain more initiative in the game with upstream iron ore manufacturers. As an important raw material of iron and steel industry, the price of imported iron ore largely determines the profit space of steel enterprises. < p > < p > thanks to mergers and acquisitions since 2016, China’s Baowu has risen to a new high of 111th on the world’s top 500 list, up 164 places compared with four years ago. This list ranks companies by revenue size. < / P > < p > this gap has prompted China Baowu to launch a group wide action called “benchmarking to find differences”. The company’s management arranged for all subsidiaries and outstanding enterprises in the industry to conduct a comprehensive comparison, find out the gap from the profit margin, return on net assets, R & D investment and other indicators, and formulate improvement measures. < p > < p > whether China Baowu can deliver a satisfactory answer in this test will ultimately determine whether its “Matthew effect” will appear as scheduled, instead of repeating the mistake of “big but not strong”.