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  • » 02/22/2016, 12.37

    CHINA

    EU against China: Overcapacity in heavy industries is wreaking “far-reaching” damage



    The Asian giant’s steel industry manufactures more than the next four largest producers combined – Japan, India, the US, and Russia – the European Union Chamber of Commerce in China said in a report, warning that more than 60 per cent of China’s aluminium industry had negative cash flow.

    Beijing (AsiaNews/Agencies) – China’s overcapacity in heavy industries is wreaking “far-reaching” damage on the global economy, with steel production “completely untethered” from market demand, the European Union Chamber of Commerce in China said on Monday.

    The Asian giant’s steel industry manufactures more than the next four largest producers combined – Japan, India, the US, and Russia – the chamber said in a report, warning that more than 60 per cent of China’s aluminium industry had negative cash flow.

    And in only two years, its cement production equalled the amount produced in the United States during the entire 20th century.

    “China has not followed through on the attempts it has made over the last decade to address overcapacity,” chamber president Joerg Wuttke said.

    The issue has led to trade tensions between the world’s second-largest economy and developed countries that accuse it of dumping in their markets.

    The EU launched inquiries this month into imports of Chinese steel, with trade commissioner Cecilia Malmstroem warning: “We cannot allow unfair competition from artificially cheap imports to threaten our industry.”

    This month, the Luxembourg-based world leader in steelmaking, ArcelorMittal, blamed China for a colossal US billion loss in 2015, at a time when thousands of jobs are being cut across the industry.

    On February 15 thousands of European steelmakers descended on the EU capital Brussels demanding that officials do more to stop the flood of cheap imports from China.

    However, many Chinese steel firms are also losing money, and Beijing has announced plans to cut production by as much as 150 million tonnes over the next five years.

    Beijing hopes to soak up overcapacity by selling its excess production to markets in Central Asia and the Middle East as part of President Xi Jinping’s “One Belt. One Road” plan, which has been touted as a revival of ancient Silk Road trade routes.

    However, those markets were not big enough to absorb China’s overcapacity, Wuttke said.

    It “is a complete mismatch, it will not put even a minor dent in the overcapacities in China”, he said.

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    See also

    03/09/2009 CHINA – EUROPEAN UNION
    EU accuses China of greater trade protectionism
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    18/04/2008 CHINA - HONG KONG
    As the Games knock China shuts the door
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    PetroChina Co. reports a 60 per cent drop in profits. China’s largest cement company reports a 30 per cent decline. The largest coal company saw its profits drop 16.1 per cent.



    21/01/2005 JAPAN – CHINA – EUROPEAN UNION
    Japan against lifting arms sale ban against China


    14/07/2005 CHINA – EUROPEAN UNION
    Barroso in Beijing to launch strategic partnership
    Chinese Foreign Minister says the two sides will discuss removing EU ban on arms sales. For the Deputy Speaker of the European parliament, this represents another confusing act.



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