On April 18, Zhang Ji, Assistant Minister of Commerce, led a Chinese government delegation to the High-Level Symposium on Excess Capacity and Structural Adjustment in the Steel Sector joined by invitees of the Belgian government and members of the Steel Committee of the Organization for Economic Cooperation and Development (OECD) in Brussels.
Zhang Ji said that although China is not an OECD member, as a large steel producer, consumer and raw materials importer and trader, China joins this discussion with a responsible attitude towards the healthy development of global economy and the steel sector, and is open, inclusive and willing to cooperate. China stands ready to discuss the issue at hand and its solution with steel-producing economies and steel consumers, trading nations and raw material providers.
Zhang Ji said that steel is the “food” for industries and economic development. After the international financial crisis, the key problem now is that the “food” consuming parties are ill and have bad appetite, so it seems that there is too much “food”. All parties should have an in-depth research and judgment on the conditions and objectively analyze the causal relations to build trust and dispel doubts. We need to see that shrinking global demand and economic downturn are the fundamental reasons behind overcapacity for steel and other sectors.
Zhang Ji stressed that overcapacity has become a common problem, challenge and obligation for relevant economies, who need to work together for a mutually-beneficial and win-win result. The Chinese government takes the issue seriously and has taken effective measures to reduce steel overcapacity. The specific measures taken by the Chinese government to reduce overcapacity are effective and we are also committed to actively expand domestic demand for steel products. Chinese steel production capacity mainly satisfies domestic demand. China not only provides no subsidy to stimulate steel export, but also imposes export tariff on certain kinds of steel products. China also imports a large amount of steel products, offering a huge market for global steel products. In the future, China will continue to have sustained and healthy economic development and there is still much potential for steel demand. China calls on all relevant economies around the globe to make sustained efforts from both supply and demand sides and take comprehensive measures to address steel overcapacity.
Zhang Ji said that the Chinese government is determined, targeted, clear-minded and pragmatic in reducing its own steel overcapacity and has taken strong and effective measures to address the issue, which was widely and highly praised. China hopes more economies in the globe will take active measures in accordance with their own conditions and development levels to make joint contribution to addressing global steel overcapacity. China hopes that other economies can also take practical measures to reduce their own overcapacity and contribute to the sustained and healthy development of global steel sector and world economic growth.
Zhang Ji said that international trade of steel products is in itself a market activity. It is based on differences and complementariness of industries and demands of importing economies and helpful for economic growth of all economies and improvement of people’s welfare. We should not only see the shock and impact on some steel enterprises of steel producing economies caused by import growth, but also see interests brought by international trade to importing economies. This will enable us to have a comprehensive, objective and rational view on the trade of steel products. It is wrong to attribute the difficulties in the steel sector to international trade and take frequent trade protectionist policies to limit imports. We also should not accuse economies with a competitive steel sector of providing subsidies. China supports a free and open international trading system and adopting trade remedies in a prudent, restrained and regulated manner. We advocate that frictions should be resolved through dialogue, consultation and cooperation. The more difficult the time is, the more we should refrain from trade protectionist measures.
Zhang Ji said in the end that China stand ready to enhance communication, exchange and cooperation with all parties and share experience and practice of reducing overcapacity in the steel sector.
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