EU and Beijing to mount joint watch on Chinese steel cutbacks
The talks come at a time when China’s steel exports in June marked the second-highest on record
China and the European Union agreed to set up a team to monitor the steel trade and track Beijing’s efforts to address overcapacity, European Commission president Jean-Claude Juncker said in Beijing on Wednesday.
Juncker also said there was a clear link between Beijing’s success in curbing excess steel output and deliberations in Brussels on granting China market economy status.
Economic ties between China and the EU have been challenged by rising protests from the EU that China was exporting government-subsidised steel products to the market, endangering local production and jobs.
Speaking at the end of the two-day China-EU summit, Juncker said the proposal to set up the platform was agreed to in a morning meeting that was only attended by Premier Li Keqiang, European Council president Donald Tusk and himself.
Juncker said China’s steel exports to the EU rose 28 per cent in the first quarter while prices fell 31 per cent in the same period. He said steel overcapacity in China was twice the output in the EU and this was “a serious problem”.
He said the EU wanted to know more about the steel trade between China and the EU, which led to the proposal to set up a working platform to check data, as well as verify and monitor progress on Chinese efforts to cut overcapacity.
We will stick to international obligations but it is a difficult issue for the time being
EU discontent about China’s allegedly steel dumping has cast a shadow on whether the bloc will grant China market economy status by the end of the year. A nod would leave limited room for the EU to launch anti-dumping investigations or impose punitive tariffs on Chinese products.
“[The EU has] not made up its mind yet,” Juncker said. “We will stick to international obligations but it is a difficult issue.”
The European Commission would hold talks next Wednesday to assess Article 15 of China’s accession to the World Trade Organisation, a key consideration in the market status issue.
Li said China was taking strong and determined measures to tackle overcapacity, and did not use subsidies to gain a competitive edge.
Data released yesterday showed China’s steel exports rose 23 per cent in June from the same period a year earlier to 10.94 million tonnes, the second-highest record after last September’s 11.25 million tonnes.
We are aware that China is taking measures to try to reduce overcapacity, but the figures show that overcapacity is still growing in a number of sectors
“We are aware that China is taking measures to try to reduce overcapacity, but the figures show that overcapacity is still growing in a number of sectors,” BusinessEurope president Emma Marcegaglia said in an EU-China business forum on Wednesday morning.
