The European Commission (EC) on Friday made a final ruling that Chinese hot-rolled steel producers received subsidies ranging from 4.6 to 38.6 percent.

China has questioned the legitimacy of the EC's anti-subsidy ruling on hot-rolled steel coil products and will take measures to protect domestic firms, Wang Hejun, head of the Trade Remedy and Investigation Bureau of the Ministry of Commerce of China said. 

Chinese financial institutions are independent market entities

The EC is "still wearing colored glasses," as it ignored progress in financial reform and market-based interest rates, Wang said.

The People's Bank of China (PBOC), the central bank of China. /VCG Photo

Ignoring the fact that all financial institutions are independent market entities, the commission continued to take state-owned Chinese banks as public institutions and mistook bank loans to companies as preferential lending, he said.

"It even disregarded basic financial facts by mistaking some bank loans directly as bestowal, inflating the subsidy range and seriously infringing the rights of Chinese companies," he added.

Chinese steel exports to Europe fell

The EC also failed to see the apparent decline in Chinese steel exports to Europe in 2016 and asserted Chinese products posed a threat to EU industry based on speculation and remote possibilities, Wang said.

What is the reason for the weak steel industry?

The fundamental reason for the poor performance and overcapacity in the world steel industry was flagging demand due to a weak global economy after the international financial crisis, Wang said.

China did not offer any subsidy on steel exports, but has taken a series of measures to contain exports and cut excess capacity. "It is neither objective nor just to ascribe the EU industry's difficulties to China," Wang said.

Hot-rolled coil is widely used in construction and machinery. /VCG Photo

The ultimate solution to steel issues lies in joint efforts from all countries to steer the world economy onto a path of steady growth, whereas "groundless accusations and imprudent trade remedy measures" help no one, Wang said.

"China is willing to strengthen communication with the European side to resolve the current problem," he added.