CISA’S STATEMENT ON JOINTLY SAFEGUARDING INTERNATIONAL STEEL TRADE ORDER

Recently, nine steel associations from America and Europe released a joint statement, claiming that “the global steel industry is currently suffering from a crisis of overcapacity and the Chinese steel industry is the predominant global contributor to this problem”, and expressing their opposition to China’s market economy treatment which will be automatically accorded in December 2016.

China Iron and Steel Association is astonished to hear about it and hereby makes the statement as follows:

1. China Iron and Steel Association totally disagrees to the practice and viewpoints of the nine steel associations from America and Europe. Chinese steel industry, as a victim of trade protectionism, opposes to using the excuse of steel trade to deny China’s market economy status. We think such behaviour is beyond the scope of industry association’s work and steel trade conflicts, as well as regardless of the fact that the global steel market has entered into a fully competitive period. In the scenario of serious difficulties facing the global steel industry, the nine steel associations, without any prior communications with China, released the perfunctory statement, which isn’t helpful to finding solutions at all.

2. Overcapacity is a common issue in the global steel industry restructuring, which requires the concerted efforts of all the parties in the global steel industry. To simply attribute the difficulties in one country or region to the Chinese enterprises is not responsible, nor is beneficial for solving the industry difficulties in their own country or region and promoting the smooth development of the global steel industry.

3. In the last few years, the Chinese government, steel industry and enterprises have taken effective measures to resolve overcapacity. The efforts they have made and the results they have achieved can be seen by everyone. Since 2011, China has actively eliminated obsolete capacities, and reinforced energy saving and environmental protection. 77.8 million tons of crude steel capacities have been eliminated and more efforts will be made to reduce capacities. At the same time, Chinese steel mills have actively cut their production in accordance with the market demand. From January to October 2015, Chinese crude steel output has declined by 2.23% y-o-y, a reduction of more than 15 million tons. It must be admitted that resolving overcapacity is a long-term process. The US and European countries spent more than one decade in resolving overcapacity in the 1970s and China will take a certain period of time to do so as well. Chinese steel mills will learn the successful practices and experience from their counterparts in the US and European countries, to accelerate the process of resolving overcapacity.

4. The economic globalization has integrated the steel industries of different countries in the world. China does not encourage steel exports and Chinese steel mills produce and sell their products in the fully competitive market. We have noted that the increasing Chinese steel exports this year have brought about some impacts on some countries and regions, and we have tried to make some adjustments. However, it can not be denied that the increasing exports are mainly due to the market forces and competitiveness and Chinese steel products are popular in the export destinations, bringing about benefits for many consumers.