Cisa slams united front opposing China’s market economy status

The China Iron & Steel Assn (Cisa) is “astonished” by global steel groups’ decision to join forces to oppose China’s attempt to gain market economy status at the end of 2016.

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Cisa disagrees with the viewpoint expressed by nine steel associations in the Americas and Europe, it said on Wednesday November 25.

“The Chinese steel industry, as a victim of trade protectionism, opposes the excuse of [protecting the] steel trade to deny China market economy status,” the East Asian trade body added.

A joint statement was released at the beginning of November by nine international steel associations, including Brazilian steel institute IABr, Latin American steel association Alacero and European steel association Eurofer.

“Given the continuing significant role of the Chinese government in many key aspects of the Chinese economy, and especially in its state-owned and -controlled steel sector, there can be no question that China remains very much a non-market economy today,” they said.

They added that “for the steel sector, recognition or treatment of China as a market economy at the end of 2016 would coincide with the peak of Chinese excess steelmaking capacity, and record levels of exports to international markets, including the USA, the EU and Latin America”.

Cisa, meanwhile, believes that overcapacity is a “common issue” across the global steel industry, and that restructuring would require effort from all parties involved in the market.

“To simply attribute the difficulties in one country and region to Chinese enterprises is not responsible, nor is it helpful in solving the industry’s difficulties in their own country or region,” Cisa said.

China has been taking effective measures to sort out the overcapacity issue in the past few years, according to Cisa.

From January to October, Chinese crude steel output fell by nearly 2.2% year-on-year, a reduction of more than 15 million tonnes, it added.

But Cisa admitted that reducing overcapacity is a long-term process.

“The USA and European countries spent more than one decade resolving overcapacity in the 1970s, and China will take a certain period of time to do so as well,” it said.

Increases in Chinese steel export volumes were mainly due to market forces and competitiveness, Cisa added, saying that it is actively strengthening industry self-regulation and further regulating exports.

“We hope the global steel industries will further enhance communication, and reinforce mutual understanding and cooperation,” it concluded, “in order to jointly safeguard the international steel trade and promote the smooth development of the global steel industry.”