EU Warns China Over Increasing Steel Exports
A simmering trade conflict between Europe and China is nearing the boil as state-supported Chinese steel companies ramp up capacity despite drastic cuts by the rest of the world.
By Ambrose Evans-Pritchard
Last Updated: 9:53PM BST 08 Apr 2009
ArcelorMittal, the world's biggest steelmaker, yesterday told its European workforce that production cuts of 50pc would continue indefinitely due to the "exceptional economic environment", raising fears that chunks of Europe's steel industry face closure.
"It is a catastrophe, particularly as management does not say when production will be resumed," Jaques Laplanche, secretary of Mittal's European Works Council, said.
A 166-page report by the European Parliament has accused China of systematic distortion of its steel market, resulting in "irrational capacity extension". This is promoted, it said, by "artificially depressed cost levels" and export rebates.
[snip]
Beggar Thy Neighbor begins?
It is foolish to expect China to become consumers of the world, while the rest of the world start saving and rebuild their balance sheet. Both Chinese regime and Chinese people in general are now going to survival mode. You won't expect much increased consumption from them.
This is rather an elementary fact, but it was none the less lost among movers and shakers of world business.