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Sun Jiuyin, stands in front of boxes of fruit-flavoured liquor in his Beijing warehouse. His company, Beijing Zhonggang Liye Trading Company, was for years a steel trader until China’s slowing economy and its attempts to leave behind old engines of growth caused a price crash that has prompted many companies to stake out new futures.Liao Lulu

Sun Jiuyin started trading steel in 2003 and eight years later started his own company. He laughed through the mad years, when the industry joked about making money with its eyes closed. And he's now enduring a price crash that has made those good times an increasingly distant memory. Steel today sells at prices equal to two decades ago. Factor in inflation and "it's now worth less than in the 1990s," Mr. Sun said.

So his company, Beijing Zhonggang Liye Trading Company, has started selling something very different: five-flavour berry medicinal liquor, wild kiwi alcohol and honeysuckle tea.

"We are a trading company," he said. "If there is profit, I will do it."

China's slowing economy and its attempts to leave behind old engines of growth haven't been kind to its smokestack coal and steel industries, nor the once-thriving construction sector and the companies it made rich. In the first half of 2015, cement industry profits fell by 61 per cent; cement-makers in the country's north lost $565-million. Coal miners have seen profits erode by 90 per cent since 2012. Nearly three-quarters of Chinese coal firms are bleeding money this year, while property developers' profits are down 16 per cent.

Their balance sheets in tatters, companies are now trying to sort out where to stake their futures. Some have sought reinvention, sometimes making jarring shifts that have seen real estate companies build electric cars, concrete makers make juice and developers invest in Internet startups and lending operations.

"Developers are facing a tough choice. They either transform themselves within China, or do some other business," said Liu Jing, a finance professor who is associate dean of the Cheung Kong Graduate School of Business in Beijing.

Beijing has sought to soften the blow with support for old guard industries, spending heavily on infrastructure this year and injecting nearly $100-billion (U.S.) into state-owned lenders. Banking authorities have poured out some $236-billion to support falling stock markets, Goldman Sachs has estimated.

The massive spending has only partially alleviated the pain, however. And the troubles that companies have encountered underscore China's broader woes, as its attempts to build a new economy run into the limitations of once-high-flying corporations struggling to build success in new fields.

Mr. Sun started to look for new lines of business as profit margins from steel trading shrunk to just 0.8 per cent. He toyed with opening a steel factory or buying real estate – but he watched a former boss try that strategy and fail. "Both are difficult now," he said.

His interest in liquor and tea was piqued by a friend's introduction to Shaanxi Lushen Group, which brews and distills in the Qinling Mountains of Shaanxi province. Mr. Sun was taken by the quality of the company's products, and its prospects in a country where consumers are increasingly interested in "healthy, natural and original" goods.

So he formed a strategic partnership that has placed him in charge of promoting and selling the drinks in north China. If liquor sales succeed, "we can stop steel trading," he said.

In some ways, Mr. Sun is doing what Chinese entrepreneurs have always done. "They see an opportunity and they just do it," said Marc van der Chijs, the co-founder of, one of China's original YouTube-style sites, who has been an angel investor in Chinese companies and is now managing partner at CrossPacific Capital in Vancouver. "In the Western world, you would only do things that are closely related to your core business."

But China's "new normal" has also forced novel changes, pushing Chinese companies to transform business models in big ways and small. SOHO China, once the country's largest office developer, is moving away from construction into property management and is now building what Mr. van der Chijs called "an Uber for offices." The idea is to stock empty rooms with tens of thousands of desks and make them available as instant offices. It would allow a company that needs space for 100 people for two weeks to immediately get the spots it needs, no long-term lease required.

Examples such as that give Mr. van der Chijs great faith in China's corporate class to turn around the slowing economy. Chinese entrepreneurs are "not risk averse. That sets them apart from many other countries. They fight for stuff and they come up with new things," he said. "I'm not pessimistic at all."

But SOHO's transition to landlord has come at a cost, with first-half net profit this year falling 95 per cent.

"In general, there are more examples of failed transformations than successful ones. Lack of experience, lack of talent, lack of money – these are all the difficulties," said Mr. Sun, whose own main business remains steel, not booze. "This is the industry we made our wealth from, and we can't easily give it up."

Corporate transformation is particularly hard when losses are accumulating and cash is vanishing. Worsening times have also exposed issues long masked by roaring good times.

"To be honest, many of the founders of small- and medium-sized cement companies in the past did not have a high level of personal ability," said Chen Bailin, deputy director of the information centre at the China Cement Association. "So where can they turn to? There is no easy place to turn to."

And so some firms are finding comfort in the old sources of profit. Hearing national calls for diversification, Fan Yuzhen, the chair of Beijing Zong'ao Longzheng Metal Materials Trading Company, expanded from trading steel to trading coal as well. Timing was not on her side. "Since I entered this business, the price of coking coal has continuously slid," Ms. Fan said.

Still, she's sticking with it, convinced prices can't fall much further. Besides, she said, there is opportunity for companies with the strength and skill to be the last standing.

"The sands must be swept away by the waves or the market will be too disorderly," she said. "And when the waves recede, all that will remain will be the elites, the gold."

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