G20: Hangzhou


G20: Hangzhou

European Commission turns up heat on China over excess steel

Jean-Claude Juncker says solution urgent and Beijing must act responsibly

PUBLISHED : Sunday, 04 September, 2016, 9:42pm
UPDATED : Thursday, 06 July, 2017, 11:35am

The European Commission president pressured China to address its steel overcapacity while attending the G20 summit.

Jean-Claude Juncker said at a press conference in Hangzhou on Sunday that the summit “must urgently find a solution to the problems facing the steel industry”.

He added that China needed to take responsibility in keeping with its rising economic power.

EU and Beijing to mount joint watch on Chinese steel cutbacks

The European Union’s discontent with the flood of cheap Chinese manufactured goods, especially steel and aluminium, has cast a shadow over Sino-EU ties and whether China can obtain market-economy status in Europe by the end of the year.

The G20 trade ministers meeting in Shanghai in July agreed to take effective measures against overcapacity and to improve communication on the issue.

But it was not the Chinese idea to include the mention of overcapacity in the communique of the trade ministers meeting, Joerg Wuttke, the president of the European Union Chamber of Commerce in China, said.

The EU and the United States had made it very clear at the Shanghai meeting that steel overcapacity was an important issue, and other members did not object to mentioning it in the communique while admitting that it was a global issue.

Record Chinese output risks raising steel tensions with US, EU

“So it doesn’t mean that China is oblivious to the idea or unable to accept it,” Wuttke said earlier this week.

At the China-EU summit in Beijing in July, both sides agreed to set up a joint team to monitor bilateral steel trade data and to supervise China’s moves to address overcapacity.

So far no progress has been revealed, while European industrial associations said the idea had been in pipeline for a while before the China-EU summit and criticised the EU leaders for failing to protect EU manufacturers.

At yesterday’s press conference, Juncker said it was critical that China accepts the mechanism to monitor steel overcapacity and its causes, adding that it would will affect how the EU’s will assess its anti-dumping and anti-subsidy investigations.

Overcapacity in the steel sector was a global problem, Juncker said, and the European steel sector had lost 10,000 jobs in recent years.

“We cannot accept this,” he said. “We must find instruments to monitor the situation in the steel sector and we insist that this is taken seriously.”

To win market economy status, China must cut steel overcapacity

Meanwhile, Juncker said the Eurozone had seen faster growth than the US and Britain this year. The unemployment ratio had dropped to its lowest level in seven years, with 7 million jobs created since the global financial crisis.

European Council president Donald Tusk said at the same conference that the Britain’s decision to leave the EU would not be a major issue at the summit, but he urged G20 countries to offer aid and assistance to help resettle refugees from the Middle East and North Africa as the EU was close to its limit to handle a new wave of immigrants.