Juncker: Over­pro­duc­tion must be solved

China Daily (USA) - - ACROSS AMERICAS - ByWANG YANFEI in Hangzhou wangyan­fei@chi­nadaily.com.cn

A top Euro­pean of­fi­cial on Sun­day said it was ur­gent to re­solve the global is­sue of over­ca­pac­ity, and he pres­sured China to take ac­tion to avoid cost­ing Euro­pean jobs— a con­nec­tion some an­a­lysts said was “ex­ag­ger­ated”.

Speak­ing at a news con­fer­ence with Euro­pean Coun­cil Pres­i­dent Don­ald Tusk be­fore the open­ing of the G20 Sum­mit in Hangzhou, Zhe­jiang prov­ince, Euro­pean Com­mis­sion Pres­i­dent Jean-Claude Juncker said he hoped global lead­ers at the sum­mit would push for a so­lu­tion to the over­ca­pac­ity is­sue, which he called a global chal­lenge.

He said over­ca­pac­ity has par­tic­u­larly hurt the steel sec­tor in Europe, where thou­sands of jobs have been lost in re­cent years, adding that he is deter­mined to de­fend the in­ter­ests of the Euro­pean steel in­dus­try and its work­ers.

“Ad­dress­ing the chal­lenge of over­ca­pac­ity in a cred­i­ble man­ner will be the test case,” he said, adding that the G20 Sum­mit “must ur­gently find a so­lu­tion” to ex­cess steel pro­duc­tion. He sug­gested China ac­cept a mon­i­tor­ing and su­per­vi­sion mech­a­nism for over­pro­duc­tion in the sec­tor af­ter the for­ma­tion in July of a work­ing group to look at so­lu­tions.

Of­fi­cials and ex­perts called for more com­mu­ni­ca­tion to re­solve trade fric­tion while tak­ing an “ob­jec­tive and ra­tio­nal” view with re­gard to China’s over­ca­pac­ity prob­lem.

Lu Feng, an econ­o­mist at Pek­ing Univer­sity’s China Cen­ter for Eco­nomic Re­search, said that some ac­cu­sa­tions aimed at China’s steel sec­tor have been some­what ex­ag­ger­ated.

“It is cru­cial to re­al­ize that China has been ac­tively fa­cil­i­tat­ing com­mu­ni­ca­tions with other na­tions to en­hance pol­icy co­or­di­na­tion,” he said.

De­spite a num­ber of prob­lems re­main­ing to be solved in China, “the na­tion has been ac­tively seek­ing so­lu­tions to tackle the prob­lem through re­forms and us­ing mar­ket­based meth­ods”, he said.

At a news con­fer­ence in Au­gust, Zhang Ji, China’s as­sis­tant min­is­ter of com­merce, played down ac­cu­sa­tions that China en­gaged in so-called dump­ing of prod­ucts at low prices to other economies, not­ing that the na­tion has im­posed ex­port tar­iffs on some ex­ported steel prod­ucts.

Zhao Chenxin, spokesman for the Na­tional Devel­op­ment and Re­form Com­mis­sion, a lead­ing reg­u­la­tor in charge of ex­cess ca­pac­ity re­duc­tion, said, “China has been tak­ing an ac­tive and se­ri­ous at­ti­tude in ef­forts to cut over­ca­pac­ity, and is striv­ing to meet ca­pac­ity re­duc­tion tar­gets on time.”

China has com­mit­ted to cutting ca­pac­ity inthe steel sec­tor by 100 to 150 mil­lion met­ric tons over the next five years.

WANG ZHUANGFEI / CHINA DAILY

Euro­pean Coun­cil Pres­i­dent Don­ald Tusk (left) and Euro­pean Com­mis­sion Pres­i­dent Jean-Claude Juncker hold a news con­fer­ence on Sun­day.

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