The global steel glut is hogging the headlines. That comes as China continues to make a significant push to reduce production and improve the quality of Chinese-made steel. The Foreign Ministry says China wants to work with the world to find an appropriate solution to the overcapacity problem.
Foreign Ministry Spokesperson Lu Kang says overcapacity in the steel sector is a worldwide problem, not just in China. Foreign Minister Wang Yi and Britain’s foreign secretary discussed the issue last weekend and said that the international community should work together to deal with the problem.
“The foreign secretary of Great Britain highly appreciated China’s great efforts in dealing with the problem domestically,” Lu said, “Also he expressed the wishes of the British government to work with the international community, including China, not only through bilateral means, but also through international instruments to effectively deal with the problem.”
China has committed to a goal of reducing steel production by 100 million metric tons by the end of this year and 200 million metric tons by 2020. China will also increase efforts to eliminate the so-called “zombie mills”. Analysts say that the government is prepared to take care of the laid-off workers and will try to digest the steel supply domestically.
“China is a large exporter of steel and a big importer as well,” Liu Baocheng, Dean CIBE, University of International Business & Economics, said “The import prices of steel are three times as much as export prices on average. Experts say China also needs to improve the quality of its steel production and move up the value chain.”
Liu adds that reducing steel overcapacity is a global task and will take time. Liu says that simply resorting to protectionism measures will not solve the problem. He hopes that China will be granted full market economy status by the EU at the end of the year so that it will be less vulnerable to protectionism.