All countries should work together to cut steel overcapacity

China’s steel sector, like those in the rest of the world, faces the problem of falling demand because of the feeble global economic recovery, although measures taken by the Chinese government to eliminate overcapacity seem to be working.

But some countries have turned a blind eye to these facts and still blame China for the excess supply of steel products in international markets, and have launched antidumping investigations into Chinese steel products with the aim of using protectionist measures to solve the problems of their steel sectors. But instead of falling prey to prejudice, these countries should join China to work out targeted measures to reduce overcapacity in the steel industry.

For a long time, China’s steel industry focused on domestic demand, not on exports. China’s accelerating urbanization, the development of its manufacturing sector and its expanded infrastructure construction mean the demand for steel in the country is till healthy. China became a net steel exporter from a net steel importer only 10 years ago, and exports have accounted for only 10 percent of its total steel output in the past decade, far lower than the 40 percent ratio of some developed countries. To restrict the export of a high energy-consuming product like steel, China has even raised its export tariffs and reduced export tax rebates, becoming the world’s only major steel producer to have such a measure in place.