China pro­gress­ing in steel over­ca­pac­ity cut

The Pak Banker - - BUSINESS -

BEI­JING: China has taken con­crete steps to re­duce steel over­ca­pac­ity, China's Min­istry of Com­merce (MOC) said on Satur­day, in re­sponse to en­cour­age­ment from the Euro­pean Union (EU). Af­ter a string of mea­sures to cut steel over­ca­pac­ity, China has seen marked progress at con­sid­er­able costs with the ca­pac­ity growth hav­ing been curbed, the MOC said. The State Coun­cil, China's cab­i­net, an­nounced on Thurs­day the coun­try will re­duce its steel pro­duc­tion ca­pac­ity by 100 mil­lion tonnes to 150 mil­lion tonnes over the next five years, af­ter a re­duc­tion of more than 90 mil­lion tonnes dur­ing 2011 to 2015. "The moves and plan show China's res­o­lu­tion," the MOC said.

The EU has urged China to curb over­ca­pac­ity as it wor­ries steel im­ports from China may hurt its do­mes­tic in­ter­ests. It an­nounced it is con­sid­er­ing new anti-dump­ing in­ves­ti­ga­tions this month, ac­cord­ing to a Rueters re­port on Fri­day. As steel over­ca­pac­ity is a com­mon prob­lem world­wide and re­quires joint ef­fort, China is will­ing to make con­tri­bu­tions to the mat­ter through sin­cere talks with mem­bers of the World Trade Or­ga­ni­za­tion (WTO), the MOC said. In ad­di­tion, the MOC also said WTO mem­bers should stop us­ing a "sur­ro­gate coun­try sys­tem" on China's ex­ports as the prac­tice will lose its le­gal ba­sis by the end of 2016, ac­cord­ing to the agree­ment signed when China joined the WTO. Un­der the "sur­ro­gate coun­try sys­tem," im­porters use costs of pro­duc­tion in a third coun­try to cal­cu­late the nor­mal value of ex­ports from a non-mar­ket econ­omy.

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