China has persuaded the European Commission to cut estimates of its spare steel capacity, EU documents seen by Reuters show, raising concerns in Europe that Brussels may be weakening its hand against cheap Chinese imports.
A sequence of drafts of proposals to protect Europe's still shrinking steel industry, to be published by the EU executive on Wednesday, shows estimates of Chinese over-capacity -- a factor that can help support a case that firms are unfairly "dumping" product abroad -- being revised down by close to 20 percent.
That revision, from 400 million tonnes in a draft early this month to 350 million and then 325 million in the most recent draft seen by Reuters, was the result of Chinese complaints, said an EU official who spoke on condition of anonymity.
"The figures were revised after China challenged our data," the official said after negotiators met in Beijing last week.
A Commission spokeswoman declined comment on the drafts.
The European Union is keen to promote trade, investment and other relationships with China. But steel producers, backed by governments including France, Germany and Britain, are pushing the Commission to do more to keep out ultra-cheap imports coming from Chinese factories which face problems of over-capacity.
Despite the imposition of EU anti-dumping duties on several Chinese producers, European competitors, whose remaining output is just 170 million tonnes a year, blame China for the loss of 20 percent of EU steel jobs since 2008, and fear more closures.
The Commission plan, to be issued after Wednesday's weekly meeting of the 28 commissioners, proposes a number of measures to counter what the draft documents describe as more than a doubling of Chinese imports in three years.
The proposals include a "prior surveillance system on steel products", a protective mechanism to be triggered if imports rise sharply, higher anti-dumping duties, and a faster system of imposing penal tariffs on unfairly cheap imports.
The proposals may disappoint some in the industry and their government supporters. France wants the inquiry period before the imposition of provisional sanctions to be cut from nine months to two. The Commission drafts do not specify the period.
The draft says other EU trade defenses may be bolstered if China is recognized by the Commission as a "market economy" in December -- something Beijing is pushing for and which European manufacturers fear will make it harder to penalize its products.
Source: Reuters