China has promised to curb steel capacity and “zombie enterprises”, US Treasury secretary Jack Lew says
China has promised to curb its steel capacity and wind down "zombie enterprises", according to the US treasury secretary Jack Lew.
China has come under fire for flooding foreign markets with steel exports, resulting in what many see as an escalating trade war between in and the US. The US has slapped tax hikes of a range of Chinese steel imports.
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Speaking after high-level talks between US and Chinese officials in Beijing, Lew told Reuters: "China has committed to ensure that its central government policies and support do not target net expansion of steel capacity; and to actively and appropriately wind down 'zombie enterprises' through a range of efforts, including restructuring and bankruptcy."
The commitment includes some new actions such as letting market forces determine which plants are excess, and two work with the Organisation for Economic Co-operation and Development on the issue.
Global co-ordination is required to deal with problems arising from steel overcapacity, China's vice finance minister Zhu Guangyao subsequently said.
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Earlier this year business secretary Sajid Javid said that China had vowed to cut its steel output following a crisis meeting in Brussels. "They're committing to do something about it and I think that's a very positive step forward," he said.
Excess steel exports from China have depressed prices and is a key factor in the industry's UK crisis, which has left thousands of jobs at risk.