China's battle with overproduction

China's goal of cutting steel production by 45 million tonnes in 2016 has been nearly half-met in the first seven months of this year, so there is still a lot of work to do. The slowdown in global economic growth and the decline in infrastructure construction led to a decline in demand for steel. As a result, the competition in the market is becoming more intense.

In fact, there has already been a lot of friction between the European Union and China over this issue, and the bloc's trade commissioner argued that China was promoting unfair competition with artificially cheap exports. The EU has also stated that the Chinese government is not doing everything it can to solve the problem.

Low capacity utilization rates were common after the 2008 financial crisis. The world average rate was 73.4 percent in 2014, while China was just two points higher. He also noted that most of the steel produced in China is used for domestic consumption.

“Over the past 10 years, China has only exported about ten percent of its total steel production, which is significantly lower than some of the major steel exporting countries. In addition, the Chinese government is taking steps to restrict steel exports, ”Zhao said.

The Chinese government spokesman also noted that overcapacity is a global problem - and all related countries are responsible for it. China opposes trade protectionism, believing that only global cooperation will help solve this problem.