Sometimes even the best of decisions can boomerang. Burdened with overcapacity, low profitability and environmental issues amid lackluster demand, the Chinese steel industry is a classic example.

Just a decade ago, steel was one of the engines of China's industrial growth. I still remember being dazzled by the ubiquitous and extensive use of steel as I explored Beijing, when I first arrived here seven years ago.

Such was the importance given to the industry that provinces jostled for space to set up steel plants of various capacities, to cash in on burgeoning domestic and global demand.