China wants EU steelmakers to be ‘rational’ about overcapacity issue – report

Riled by protests in Brussels by struggling European steelmakers demanding a stop to a flood of cheap Chinese imports, analysts in China hit back saying steel exports from the world’s second-biggest economy were within international trade norms.

“China’s steel exports are strictly in line with the international trade rules, and European steel industry representatives should be more rational when tackling the overcapacity issue,” Global Times quoted an analyst as saying.

Thousands of European steelmakers descended on the EU capital Brussels on Monday demanding that China be denied market economy status, a designation that would make it harder to raise barriers against cheap Chinese steel products.

“As labor costs in China are still lower than in the EU, it makes domestic steel products cheaper,” Xu Hongcai, director of the Economic Research Department of the China Center for International Economic Exchanges, told the Global Times.

Xu noted that the low price of Chinese steel products does not necessarily mean that the central government is using tariffs or subsidies to protect the domestic steel industry.

“While facing the overcapacity issue, industry representatives in the EU should calm down instead of blaming China,” Xu said.

China joined the World Trade Organization (WTO) in 2001 as a developing country with an economy run largely by the State, but was promised a review within 15 years to win a change in status to put it at par with its major trading partners.

Without market economy status, the WTO’s 162 member countries are much freer to slap anti-dumping measures on cheap Chinese products.

“It’s a crucial year to review the status,” Xu said, noting that the nation should be confident as it has always followed the WTO rules.

A Ministry of Commerce (MOFCOM) official on Sunday said that he expected the European Commission (EC) to strictly follow the WTO rules in its anti-dumping investigation into Chinese steel exports.

The MOFCOM official said that the EC should be prudent, restrained and lawful in employing trade remedy instruments.

 

 

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