China's steel sector is seen as fragmented, with too many companies competing for market share. CPPCC member Sun Zhaohui is proposing measures to promote integration within the industry. Tao Yuan reports.

Panzhihua Steel, or Pangang - a large state-owned steelmaker based in southwest China. In 2010, it merged with Anshan Steel to form one of China's biggest steelmakers. CPPCC member Sun Zhaohui wants to see greater consolidation in the country's fragmented steel sector. He has worked in Pangang for more than three decades, researching vanadium and titanium resources.

SUN ZHAOHUI CPPCC MEMBER "China has been pushing for reforms in the steel sector. So I think the time is ripe now for efforts to boost concentration of the steel industry."

Together, China's four biggest steel companies produce less than 20 percent of the country's steel output. Sun wants to see that figure rise to 50 percent or more. Low industry concentration can lead to vicious competition - companies lowering standards for profit, creating low quality products and high levels fo environmental damage.

SUN ZHAOHUI CPPCC MEMBER "It was a time when people ate people. There were no moral boundaries. Companies tried to pull each other down. This was the only way to survive a market without order."

China is on a drive to streamline its heavy industries Years of breakneck growth have created overcapacity. Now the government wants to curb production. But despite a crackdown on illegal mills, steel output increased, reaching a new high last year at 830 million tonnes, as larger players rushed to take advantage of surging prices.

TAO YUAN PANZHIHUA, SICHUAN PROVINCE "This is a market difficult to regulate with too many companies vying for a share of the market. But if the proposed plans to boost market concentration happen, it could mean a healthier and more profitable industry."

One benefit, says Sun, is what he calls "parallel development" - with less competition, companies can stop churning out the same products, and instead focus their energy on developing specializations. Pangang for example, is now going full throttle with is vanadium and titanium research. Sun says it's time for other companies to follow suit. With a massive industry upgrade in place, he says it's possible to strike while the iron is hot. TY, CGTN, Panzhihua, Sichuan Province.