China responds to Britain, saying steel needs global cooperation
BEIJING (Reuters) – China wants to work with the rest of the world to find a resolution to overcapacity in the steel sector, its foreign ministry said on Monday, after Britain asked the world’s top producer of the alloy to tackle the problem quickly.
Britain’s Foreign Secretary Philip Hammond made the request while meeting his Chinese counterpart Wang Yi in Beijing on Saturday.
Huge overcapacity and weak demand have prompted China, also the world’s top steel consumer, to ramp up exports to record highs, dragging down global prices to decade lows.
Britain wants to stem a flood of cheap imports, which India’s Tata Steel has blamed for its decision to pull out of the United Kingdom, putting 15,000 jobs at risk.
Chinese Foreign Ministry spokesman Lu Kang told a daily news briefing that overcapacity was a global problem caused by declining demand for steel and said Hammond and Wang had talked about how to effectively address it.
“At this meeting the Chinese side also highly appraised the long-term British policy of open free trade and said we are willing to work with the international community, including Britain, to appropriately resolve this issue via international cooperation,” Lu added.
He did not elaborate.
China makes half of the world’s steel and produced 803.8 million tonnes in 2015. That was almost eight times the output of Japan, the No. 2 producer, and nearly 20 times Germany’s.
China’s production capacity is far bigger at 1.13 billion tonnes and it exported a record 112 million tonnes last year.
The country needs to step up efforts to shut down poorly performing mills, a government official has said.
Tata put its entire UK business up for sale last month, including its flagship production plant at Port Talbot in south Wales, saying it could no longer endure mounting losses caused by increased shipments to Europe from countries like China, high manufacturing costs and domestic market weakness.
China’s Ministry of Commerce separately urged the European Union to abide by the European Court’s decision this month that found anti-dumping duties on China’s Hubei Xinyegang Steel Co. were illegal.
The European Court decision indicated that the European Commission had “abused its discretionary power and wrongly applied the law” in its investigation, the ministry said in a statement on its website.
“As an important World Trade Organization member, the European Union should strictly respect world trade rules, and draw lessons from this court decision,” it said.
(Reporting by Ben Blanchard; Additional reporting by Michael Martina; Editing by Himani Sarkar and Simon Cameron-Moore)