Mr. Li Chenggang

Member of the CPC Leadership Group of the Ministry of Commerce of PRC and Assistant Minister

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The Ministerial Meeting of Global Forum on Steel Excess Capacity Held in Berlin

On November 30, 2017, the Ministerial Meeting of Global Forum on Steel Excess Capacity was held in Berlin, Germany. Assistant Minister of Commerce Li Chenggang was invited to attend the meeting by the government of Germany, the host of this forum.

China pointed out at the meeting that the steel excess capacity was a common, cyclical and structural problem emerging in the process of global economic development rather than a unique economic phenomenon in the steel industry. It is a common difficulty and challenge faced by every country in the world rather than only by China. It happens for various reasons, and the world economic recession caused by the American Financial Crisis in 2008 is the fundamental cause of this steel excess capacity which turns out to be a global issue and leads to the decrease of steel demand. This is also a consensus reached by the leaders at the G20 Hangzhou summit.

China stressed that in recent years, the Chinese government has taken the initiative to promote the supply-side structural reform, and through marketization and legalization measures, it has actively eased the excess capacity problem with clear goals, powerful measures and remarkable achievements. Over 100 million tons of backward steel capacity has been obsoleted since 2016. According to the information shared by the forum members, in 2014-2016, China’s eliminated steel capacity accounted for over 120% of the world’s total. For that outcome, China has paid huge prices and has overcome numerous difficulties. In 2016 alone, the steel industry re-arranged jobs for 201,000 staff, exceeding the steel industry’s total employment in the US and Japan respectively, equivalent to 60% of that in Europe. China’s initiative in resolving steel excess capacity is a self-conscious, proactive, firm and continuous move as well as the need of self-development. This move has made significant contribution to the development of the world steel industry.

China said that China had actively participated in this forum with constructive attitude and promoted its process. China welcomes the consensuses reached at this forum. China hopes that all members will further strengthen information sharing and cooperation, and lead the steel industry to form a sound development trend in order to contribute to the healthy development of global steel industry.

The Global Forum on Steel Excess Capacity was established in December 2016 according to the consensus reached at the G20 Hangzhou summit, and the forum consists of 33 members including the G20 members and the interested OECD members. According to the requirement of the G20 Hamburg Summit communique, the forum should draw out a substantial report containing specific measures and suggestions before November 2017 to work as the base of taking practical and quick policy actions.