Zeng made the remarks at a ceremony to mark the beginning of construction of the plant on Monday in Caofeidian, near the Bohai Bay about 220 kilometers east of Beijing.

   The 21-square-kilometer plant, which is known in Chinese as Shougang, will begin operation at the end of 2008 and completely replace Shougang's old facilities in Beijing by 2010.

A ceremony to celebrate a new plant of the Beijing Capital Iron and Steel Group
Co., known as Shougang in Chinese, is held in Beijing March 12, 2007. 

Chinese Vice Premier Zeng Peiyan (Center) made remarks at the ceremony to mark the
beginning of construction of the plant on Monday in Caofeidian.

   Relocating Shougang will improve the environment in Beijing and help the municipal government honor its commitments to improve air quality in time for the 2008 Olympics, said Zeng.

   It will also strengthen Shougang's competitiveness and boost the restructuring of the country's steel sector.

   The new steel plant, a joint venture between Shougang and Tangshan Steel and Iron Group, will provide new opportunities for the development of its parent companies, help change the growth mode of China's steel industry and promote development of the Bohai Bay region, said Zeng.

   The plant, which will cost 68 billion yuan (8.7 billion U.S. dollars) to build, has a designed production capacity of 8.98 million tons of iron, 9.7 million tons of steel and 9.13 million tons of rolled steel a year.

   It will adopt new technologies that help reduce pollution.