Dull market pushes coal bosses into new professions

(Ecns.cn)--Many Chinese coal barons are being forced to find new business opportunities.

Data from the Bureau of Statistics in Shanxi, a province that produces more than 70 percent of the country's coal, show that profits at many coal companies have declined dramatically.

In April, provincial coal enterprises earned profits of 40.08 billion yuan, a decrease of 33.6 percentage points from the same period last year. The industrial profit growth rate is also slowing down.

Coal bosses who formerly never worried about sales are now facing enormous pressure. Cargoes of coal are stuck in the middle of the distribution chain, and fewer and fewer clients are coming to buy them.

Zhang Zhibin, an analyst at 315.com.cn, an e-commerce website for bulk commodities, said that many companies have cut employee wages to cope with the crisis. Zhang cited the China National Coal Group, China's second-largest coal enterprise, which carried out a salary cut of 10 percent from April to May.

Since 2008, a total of 2,600 coal companies in Shanxi have been reduced to 130. Yuan Chunqing, secretary of the provincial committee of the Communist Party of China, told the public last May that "many coal bosses will gradually fade from history's stage."

According to Wang Ailin, head of the Taiyuan Committee for Private Economy Development, many coal bosses have begun investing in fields such as real estate, tourism, agriculture and even loan sharking.

Some have shown a special interest in modern agriculture, Wang said.

The Shanxi Daily reported in June that more than 200 coal bosses in Shuozhou had invested 3.5 billion yuan in an agricultural project that created nearly 50,000 jobs and involved 160,000 families.

Another 30 coal bosses chose to cooperate with property developers. With a total investment of 1.11 billion yuan, they built 26 demonstration gardens for agricultural science and technology, which mainly focus on vegetables, flowers, fruit and nursery stocks.

By now, the city has over 170 agricultural gardens, occupying a total area of 11,531 acres. The number is still growing, according to the Shanxi Daily.

Other coal producers have favored the high-tech industry. According to the 21st Century Economic Report, former coal boss Lu Hongbo has devoted himself to producing smart phones.

Lu said that with his low-priced Nicai phones he intends to eventually catch up with the iPhone and beat the Xiaomi Phone in sales.

Last year, Lu set up 3,500 stores nationwide for Nicai phones and sold millions. Farmers, migrant workers and students have been the main customers.

Geng Shiwen of Linfen, another city in Shanxi, has taken a different path. He bought a hill in his hometown and plans to invest 780 million yuan to transform it into a famous sightseeing spot.

Zhao Fuhai, an overnight billionaire who ran a coal mine for decades and experienced many ups and downs in the industry, has found his talent in education.

Zhao made his decision when a professor told him, "The more you dig, the less coal there will be. But the cultural industry is quite the opposite: the more you dig, the more you get."

Zhao has since launched several training centers for those planning to study overseas. He has also invested in films, dramas and tourist spots.