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Ambassador: China and the EU Must Work Together to Promote the Healthy Development of the Global Steel Sector

On March 2, Politico publishes an article by H.E. Ambassador Zhang Ming, Head of the Chinese Mission to the EU, entitled China and the EU Must Work Together to Promote the Healthy Development of the Global Steel Sector.

Recent months have seen positive developments in the EU steel sector, marked by rising steel prices and improving business performance. I am pleased for my European friends. However, I am also disturbed when some say that the recovery is attributable to the EU trade remedy measures which have successfully kept out steel "dumped" by China. This is neither true nor fair. As Chinese Ambassador to the EU, I have a duty to set the record straight.

First and foremost, we regret that the EU has launched a great number of anti-dumping and countervailing investigations against Chinese steel products and has applied stricter restrictions on China under the discriminatory analogue country methodology. The EU needs the steel products that it is importing from China. In other words, even if the EU did not buy them from China, it would still import them from other countries. According to the latest report by the European Steel Association, the EU's steel imports from China dropped by 41% from January to November 2017. However, the gap was immediately filled by other countries, with some even doubling their steel exports to the EU.

Second, more than 85% of China's steel output is consumed domestically. China does not encourage steel exports. We do not have export subsidies. Rather, as early as over ten years ago we started to restrict steel exports by levying tariffs. It was not until January this year that we abolished export duties on certain steel products. Still less does China encourage steel "dumping". In fact, thanks to structural reform, the days are long gone when China had to compete on price.

Third, those who glorify trade remedy measures not only have a wrong understanding of the real causes of the sluggish steel sector in Europe, but also fail to see the responsible, proactive and genuine efforts of China to cut overcapacity. Since 2016, reducing excess capacity has been a priority for China's supply-side structural reform. China must do this if it is to transform and upgrade its economy. Since 2016, China has cut over 115 million tons of steel capacity and eliminated an additional 140 million tons of substandard steel capacity. China's efforts are intensive and effective, contributing greatly to the recovery of the global steel market, including that of Europe. China has made huge sacrifices in this process. Over a million Chinese workers will have to be reemployed, which is more than all the steel workers in the EU. But however difficult it is, once a target is set, we Chinese will work unswervingly to achieve it.

China has also done a great deal of work for the establishment and development of the Global Forum on Excess Steel Capacity. We made a positive contribution to the deliverables of the Berlin meeting last November. Europe experienced steel overcapacity itself decades ago and has accumulated many best practices, including the successful restructuring of the Ruhr industrial region in Germany. We stand ready to share our positive experience with all sides including Europe through the Forum in order to address the common challenge.

Mutual accusations do not help cut overcapacity. Joint action to boost demand is the best approach. We hope that our European friends view overcapacity in a comprehensive, objective and rational way and restrain the use of trade remedy measures to create a level playing field for Chinese enterprises. In a nutshell, China and the EU need to work together to promote the healthy and sustainable development of the global steel sector.

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