Reflections

Pushing Chinese Steel Abroad

May 18, 2016 | 02:31 GMT
Pushing Chinese Steel Abroad
China, by far the world's largest steel producer, is working to cut its production overcapacity, but local resistance has made that policy difficult to enforce.
(KEVIN FRAYER/Getty Images)

The Chinese government has an unusual problem: The country produces much more steel than it can actually use. A possible solution to the problem comports with the evolution of the Chinese economy. On May 17, the People's Daily citing the general manager of a Chinese investment company, reported that China was preparing to relocate 10 million metric tons (mmt) of steel production capacity to Brazil, about a third of it to be run by a consortium of China's high-end steel producers. While the words of a single investment company manager do not necessarily represent the views of the government in Beijing, the fact that the report came in the Chinese Communist Party's official mouthpiece suggests that the country's leaders are pushing for its major steel conglomerates -- some of the world's largest steelmakers -- to expand and dominate the global steel industry....

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