By Anil Mathews (ScrapMonster Author)
April 13, 2016 01:41:02 AM
BEIJING (Scrap Monster): The Chinese ambassador to the UK, Liu Xiaoming has urged both the countries to work together in order to solve the current crisis situation faced by their steel industries. Blaming each other will not address the issue in any manner and offers no solution to the problem, Liu noted.
In an article published in ‘The Daily Telegraph’ Lui noted that there are allegations by a section of the industry in Britain that China is to be held responsible for the closures and layoffs in British steel industry. Moreover, it is being accused that the UK steel industry is being hurt by uncontrolled dumping of steel products from China. However, Lui notes that making China the ‘scapegoat’ will not offer any solution to the issue.
The Chinese ambassador points out that there are several reasons behind the difficulties faced by the British steel industry. The key issue remains to be global overcapacity caused by declining demand and escalating production costs by UK steel mills. The industry’s shift from traditional manufacturing economy to the one of modern services and finance is also to be blamed for the current crisis.
The imports of Chinese steel are unlikely to have significant impact on British steel sector. Incidentally, Chinese steel imports account for only a small fraction of the UK’s total steel imports. The country’s share of UK steel imports was only 11% in 2015. Out of the 6.66 million tonnes of steel imported by the UK, China accounted for only 760,000 tonnes. In value terms, Chinese steel imports constituted only 7.6% during the year.
Liu noted that China mainly exports mainly ordinary steel rods and plates which are no more domestically produced by the UK.
The Chinese steel industry is currently going through extremely challenging phase, Lui noted. He called upon governments of both the countries to indulge in closer dialogue and co-operation instead of blaming each other for the crisis.