Bao Steel — Chinese government-financed integrated steel

Largest steel company in the world (as of lecture date); financed by Chinese government. Same pattern as POSCO.

Same thing for Intel — what does it cost to build a silicon fab? 15 or 20 billion dollars. What does it cost Boeing to design a new aircraft? 15 or 20 billion dollars. What does it cost Pratt & Whitney or General Electric to develop a new jet engine? 10 or 15 billion. These are bet-your-company investments. Very few companies in the world can, or are willing to, do that. All the new steel mills since 1965 — there have not been a lot of integrated steel mills built, but they were built by countries, not by companies. The Koreans built — POSCO became the world's largest steel company. I was the POSCO professor; I went over there in 1999, had to give lectures to them about the steel industry. They had surpassed U.S. Steel. U.S. Steel sold them the technology, they built it. But it was the Korean government that was financing it. Who's the largest steel company in the world today? Bao Steel, the Chinese. Again, who finances that? The Chinese government. Lakshmi Mittal, I think, is number two. But Lakshmi Mittal is a conglomerate of like 15 of the companies that existed in 1970. Lakshmi Mittal was smart enough to go around and buy them up. I don't know who gave him the money, but he went around and bought them up, and he's a rich man because of it.