China faces new EU pressure to curb steel overproduction

The European Union calls on the industrialized countries of the world to put pressure on China to curb its overproduction of steel, which is becoming a major irritant in Europe's relations with the Asian country.

Speaking at a press conference, European Commission President Jean-Claude Juncker said it was "important" for China to adopt overcapacity monitoring in the iron and steel sector. According to the draft G-20 statement, the countries intend to approve the creation of the so-called Global Forum on excess steel capacity, with the participation of the Organization for Economic Cooperation and Development. The text still needs to be approved by all the leaders, and the talk of overproduction of steel has been reluctantly accepted by the Chinese and Indian delegations.

Juncker said he is determined to "defend the interests of the European steel industry and its workers." He added that the sector has lost tens of thousands of jobs over the past few years in Europe, in part due to China. Currently, the EU has introduced anti-dumping measures in 37 cases, 15 of which concern Chinese companies.

European officials believe Chinese industrial policies are allowing local producers to flood European, American and other developed markets with cheap steel products.

In his speech at a business forum, Chinese President Xi Jinping implicitly acknowledged excess steel and coal capacity, but rejected foreign pressure, saying that the steps China is taking on its own towards reductions are "more than compelling."

China, the world's largest steel producer, has doubled its exports to the EU in the past two years. Steel prices in the EU have declined by about 40% over the past two years. China produced 466 million tonnes of steel in the first seven months of this year, or half of the world's total production.