China bends on steel

Lat­est news from the G20 sum­mit

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China agreed at the G20 sum­mit to steps to­ward re­duc­ing its po­lit­i­cally volatile steel ex­ports but avoided bind­ing com­mit­ments.

Bei­jing made boost­ing slug­gish global growth through in­creased trade a theme of the Group of 20 meet­ing in this lake­side city south­west of Shang­hai, but faces com­plaints that a flood of low-cost Chi­nese steel ex­ports threat­ens US and Euro­pean jobs, en­cour­ag­ing calls for trade curbs.

In a joint com­mu­nique due to be re­leased af­ter the meet­ing, China agreed to the cre­ation of a global fo­rum to study excess pro­duc­tion ca­pac­ity in the steel in­dus­try, ac­cord­ing to Ja­pan’s Nikkei and Yomi­uri news­pa­pers. They cited uniden­ti­fied Ja­panese diplo­mats.

The agree­ment in­cluded no bind­ing lim­its on Chi­nese out­put. Chi­nese of­fi­cials in­sist steel over­ca­pac­ity is a global is­sue, but US and Euro­pean of­fi­cials say Bei­jing’s vast state-owned in­dus­try, which ac­counts for half of global out­put, is the root of the prob­lem.

Wash­ing­ton has hiked im­port du­ties by 500 per cent on Chi­nese steel to off­set what it says are im­proper sub­si­dies.

US Pres­i­dent Barack Obama, Chi­nese Pres­i­dent Xi Jin­ping and other lead­ers at the two-day meet­ing, which ended yes­ter­day, called for ef­forts to de­fend free trade in the face of eco­nomic anx­i­ety that has fu­elled de­mands in the United States and Europe to pro­tect lo­cal in­dus­try.

China hopes its sta­tus as this year’s G20 leader will in­crease its in­flu­ence in global eco­nomic man­age­ment. Chi­nese of­fi­cials want the group­ing, cre­ated to re­spond to the 2008 fi­nan­cial cri­sis, to

take on a longer-term reg­u­la­tory role.

In clos­ing the sum­mit, Xi said it had con­trib­uted to en­cour­ag­ing new progress in boost­ing global growth.

Xi said agree­ments had been reached on re­forms to global fi­nan­cial in­sti­tu­tions, com­bat­ing in­ter­na­tional tax eva­sion prac­tices and fight­ing cor­rup­tion.

In a state­ment to in­ter­na­tional me­dia last night, Xi said that un­der fu­ture co­op­er­a­tion guide­lines, those who have com­mit­ted eco­nomic crimes will have nowhere to hide.

He said the sum­mit would also go down as a mile­stone in tran­si­tion­ing the G-20 from a cri­sis-man­age­ment mech­a­nism to one geared to­ward aid­ing in the long-term man­age­ment of the global econ­omy.

How­ever, the meet­ing was of­ten over­shad­owed by other con­cerns. North Korea added to these yes­ter­day with the fir­ing of three bal­lis­tic mis­siles off its east coast.

The US said the tests and other re­cent ones like it vi­o­late UN Se­cu­rity Coun­cil res­o­lu­tions, and also pose a threat to air­craft and com­mer­cial ships.

At around the same time, Xi was telling his South Korean coun­ter­part, Park Gyun-hye, that China is op­posed to the de­ploy­ment of a pow­er­ful US anti-mis­sile sys­tem in South Korea.

China has re­sponded an­grily to Seoul’s de­ci­sion to base the US Ter­mi­nal High Al­ti­tude Area De­fence sys­tem south of the cap­i­tal, Seoul.

While Seoul and Wash­ing­ton say the sys­tem is in­tended solely to de­fend against North Korea’s mis­sile threat, Bei­jing says it will al­low the US mil­i­tary to peer deep into north­east­ern China.

HUGE: China’s steel in­dus­try ac­counts for half of global pro­duc­tion

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