13 March 2016

Will China gain market status

According to representatives of Reuters, the European Commission plans to link the provision of the PRC with the status they expect. This is the status of a "country with a market economy." According to the terms of the PRC's entry into the WTO, the decision must be made before December 1, 2016. At the same time, the resolution of the existing contradictions in the steel market sector is taken into account. Negotiations between China and the European Union are scheduled for mid-March. On them the European representatives plan to demand an intensive reduction of production capacities. Also it will be a question of decrease in volumes of export of the steel goods of the Peoples Republic of China.

For the Chinese side to get a market status is a matter of principle. Its presence will provide the PRC with some protection in conducting anti-dumping investigations against it. Currently, the establishment of a dumping margin does not take into account the prime cost of producing Chinese steel. In this case, "similar" data on the production of steel products in other countries are used.

The American side is also exerting pressure on the PRC. Michael Froman, America's sales representative, said about future negotiations with other countries. Their main goal is to stop subsidizing metallurgical state enterprises. It also points out the need to eliminate unscrupulous trade. In this case, the main claims are made to the steel industry of the PRC. It is noted that the scale of sanctions applied to the PRC for today is truly unprecedented. As an example, one can take the latest anti-dumping and countervailing investigations of the US Department of Commerce. They are directed against the stainless steel of the PRC production. At the same time, the list includes an amazingly wide range of products.

At the same time, earlier China announced its intention to reduce steel production capacity for 5 years. In the annual reduction will be about 100-150 million tons. However representatives of the western countries speak about insufficiency of similar measures. According to experts from Europe and the United States, Chinese excess annual capacity is 400 million tons.

Apparently, certain circumstances lead to such accusations of Chinese competitors in all sins. Recently, the US and European steel sector is in an undeniable crisis. However, its main reasons are a lack of demand. Also, the high manufacturing costs of companies are an important negative factor.

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