China agrees to reduce its steel exports

G20 summit ends with clear and forceful endorsement of free trade

CHINA agreed to steps toward reducing its politically volatile steel exports, but avoided binding limits as leaders of major economies ended a summit yesterday with a forceful endorsement of free trade and a crowded agenda that included the Koreas, Syria and refugees.

In a joint statement, US President Barack Obama and Chinese President Xi Jinping and the leaders of Britain, Japan, Russia and other Group of 20 (G20) economies pledged to boost global growth and to strengthen the global financial system.

In an effort to shore up public support for trade, they promised “inclusive growth” to spread the benefits of closer global integration to millions of people who have been left behind by wrenching change.

The pledge reflected a growing recognition that economic strains are fuelling political tensions and a growing clamour to protect local industries.

Chinese leaders hope the two-day meeting will increase their influence in managing the global economy.

They have said they want the G20, created to respond to the 2008 financial crisis, to take on a longer-term role regulating the global economy.

The joint statement reflects that ambition by calling the G20 the “premier forum” for economic co-operation. Complaints Beijing made trade a theme of the gathering in this lakeside city south-west of Shanghai, but faces complaints that a flood of low-cost Chinese steel into global markets threatens The benefits of trade and open markets must be communicated to the wider public. US and European jobs, propelling the rise of political movements that promise to curb trade.

The joint statement calls for formation of a steel forum under the Organisation for Economic Co-operation and Development to study excess production capacity.

In a concession to Beijing, the statement does not mention China by name and says that excess steel capacity is a global issue, though US and European officials say the vast Chinese state-owned industry, which accounts for half of worldwide output, is the root of the problem.

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

Beijing promised in January to reduce steel production capacity by 100 to 150 million tons by 2020, a pledge Xi repeated on Saturday ahead of the G20 meeting. Excess capacity But that is half of China’s estimated excess capacity of 300 million tons, so deeper cuts will be required to bring it in line with demand.

“The market is distorted by subsidies and other support measures,” Japanese Prime Minister Shinzo Abe said.

The president of the EU’s governing body, Jean-Claude Juncker, called on Sunday for the G20 to take action on steel.

He said the trade bloc would look at Beijing’s response when deciding whether to grant China market economy status, which would make it harder to bring anti-dumping cases.

Obama, Xi and other leaders called repeatedly during the meeting for governments to defend free trade.

“The benefits of trade and open markets must be communicated to the wider public more effectively,” the joint statement said. – AP