China cuts 200,000 steel jobs, calls on other nations to share burden

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China's reduction of steel supply was more than 120 percent of the total cut of the rest of the world between 2014 and 2015, according to information shared among members of the Global Forum on Steel Excess Capacity.

The world's largest steel producer is calling on others to share the downsizing pains. "Steel overcapacity is a common challenge facing countries across the world, rather than a problem unique to one country," Li Chenggang, Assistant Commerce Minister of China told a press conference following the meeting.

China's drive to cut the production come at a hefty price, and in 2016 alone, 201,000 steelworkers were relocated in China, more than in the US and Japan.

But China, taking the lead, does not want to be the only one shouldering the responsibility of eliminating overcapacity in the sector – recent supply-side reforms and restructuring reducing excess capacity by over 100 million tons since 2016 – while the rest of the world just watches, said Li.

China's downsizing of the industry has taken its toll on jobs, and it's now asking other nations to share the burden. /Reuters Photo

Brigitte Zypries, German Federal Minister for Economic Affairs and Energy and Chair of the meeting, said, "I am delighted that the G20 countries and other OECD countries have been able to agree on a report on steel, setting out concrete recommendations for reducing global capacities in the steel sector."

According to the agreed report, the members will enhance the market function, refrain from market-distorting subsidies and share information for a greater transparency.

But while the US representative Jamieson Greer praised the initial steps, he also said the G20 had not been able to make "meaningful progress" on addressing the "root causes" of the overcapacity.

“Addressing the ongoing steel excess capacity issue situation will require several concrete policy steps including allowing markets to function, removing market-distorting subsidies and other forms of state support and treating state-owned enterprises and private enterprises equally," Grier said.

In April, the Trump administration ordered a probe into restrictions on imported steel, on the unusual basis that it may pose a threat to national security. The results of that probe have yet to be released.

The EU has said it would respond in kind to any increase in tariffs by the US, sparking fears of a global trade war.

The meeting was held on the last day of Germany's G20 presidency. Argentina now takes over the rotating role for the coming year.

The Global Forum on Steel Excess Capacity was founded in December 2016 following the consensus of G20 Hangzhou Summit, with a total of 33 members.

(With additional reporting by CGTN's Ira Spitzer)