China recognises European concerns about overcapacity in its steel sector but believes it is a symptom of falling global demand, Chinese Premier Li Keqiang said yesterday.
Speaking to visiting German Chancellor Angela Merkel, Li was eager to counter criticisms that a glut of Chinese steel exports is overwhelming producers in overseas markets including Germany and the US.
“We don’t deny there are many difficulties between Germany and China – for instance, the wide concern over China’s steel overcapacity,” Li said. “But steel overcapacity is a problem of the world, not only China. The world’s market is decreasing.”
The talks came amid concerns over trade and the ability of German companies and foreign non-governmental organizations to operate in China.
In talks with the US earlier this month, China promised to rein in production of steel, among bloated industries Washington and other trading partners complain are dumping exports too cheaply, hurting foreign competitors and threatening jobs.
China’s trading partners broadly believe Beijing has responded to a supply glut by encouraging low-priced exports.
Earlier this year China’s government announced plans to shrink state-owned steel and coal producers at a cost of millions of jobs. However, that project will take time, and the flood of low-cost steel has prompted protests by European steelworkers and was cited by Tata in its decision to sell its money-losing operations.
Washington has imposed anti-dumping tariffs and is investigating if Chinese mills are using stolen US technology. The EU has launched its own probe into possible dumping.
Source: Scotsman