Group agrees to tackle steel oversupply issues

GROUP of Seven (G7) leaders agreed to work together to tackle oversupply in the Chinese economy, but did not go as far as calling out the country by name for steel dumping.

Speaking at the Ise-Shima summit in central Japan yesterday, Japanese deputy chief cabinet secretary Hiroshige Seko said leaders pledged in their first session to deal with oversupply issues, and specifically discussed steel.

“There was various analysis and exchange of opinions about China’s situation,” Seko said. “This relates to a country that was not present, so I cannot give details.”

Seko’s comments come after European leaders sounded warnings about China’s economy and its perceived oversupply of steel.

UK Prime Minister David Cameron told reporters this week en route to the summit that Europe’s anti-dumping actions against Chinese steel had been effective. European Commission president JeanClaude Juncker, meanwhile, told reporters that Chinese steel overcapacity was a “general problem” and Europe could not afford to be “defenceless” against distorted markets.

China is expanding its overseas sales of its cheaper metal. The European parliament passed a resolution opposing granting market economy status to China.

The EU has launched an anti-subsidy review of Chinese steel, while India has imposed import barriers on the metal. US Treasury Secretary Jacob Lew called on China ahead of the summit to cut excess industrial capacity for key metals.

Chinese Foreign Minister Wang Yi told reporters that China expected G7 members to refrain from applying double standards. “We don’t want to see any discussions or actions that might escalate the tension in the region.”

Official data suggested China cut 90 million tons of steel capacity over the past five years, almost doubling its goal of 48 million tons. The EU imported 32 million tons of steel last year, and one fifth of that came from China.

Ahead of the G7 summit, JFE Holdings chief executive Eiji Hayashida warned last week that it would not be effective to discuss the steel glut in China’s absence.