People's Daily Responds to U.S. Steel Charges

An article in the People's Dails asks, "what kind of market economics is this?" in regards to U.S. anti-China steel tariffs.
April 28 Ministry spokesman Zheng Lixin to a question on China's steel industry, said the Chinese steel industry capacity utilization and the world average is consistent, steel overcapacity is not unique to China, the world needs a common response. In particular, he stressed that the current Chinese steel mainly for domestic consumption, itself remains the world's fifth largest steel importer, and has been carried out under the WTO trade rules. China not only does not encourage exports of steel products, and is the world's largest producer of steel in the country a unique initiative to take restrictive measures against ordinary steel exports.

International Economy and Trade Department of Economics, Peking University Professor Wang Yuesheng, in an interview with this reporter said, similar to the "337 investigation" of trade protectionism has long been common in recent years, from the differences between the parties to the business interests of its essence, but different during the performance level, in the form of different.

"Accusing the presence of 'price-fixing', 'false labels' and other Chinese steel trade issues, said its rigorous basis itself is not clear enough. For example, the United States does not recognize China's market economy status, it will' default 'government and business relationship' is not normal ', which led to the true costs of steel products in China for its determination is too low." said Wang Yuesheng, such "beggar thy neighbor" thinking of the business is likely to lead to counter-measures business partners, or even a trade war. Especially in the sensitive period fragile world economy, trade war would lead to a lose-lose, is not conducive to long-term interests of most people.
The U.S. is among the nations least reliant on trade and it has a huge trade deficit. Leaving aside the zero sum game of global power, the U.S. is among the nations that will be least affected by a trade war.
It is worth mentioning that the trade-protectionist does "more harm than good", the Chinese officials not only did not heavily subsidized steel companies , but the steel industry "reduce overcapacity" is the main battlefield in pursuit of economic transformation and upgrading. For example, recently the central bank and other four ministries published an updated opinion on requirements: the steel and coal industry long-term losses, loss of liquidity and market competitiveness of enterprises, must be resolutely quit compression related loans. Related departments should take the initiative to track local governments and the central enterprises to solve the steel, coal embodiment surplus production capacity, early response possible risks.
Yet steel production rises because local governments do not listen to Chinese officials.
Seclusion is not a way out, there is openness and cooperation in the future. The United States as a typical immigrant country, open and inclusive values, mutual win-win spirit of the contract are the achievements of its economic strength and great power status of important spiritual core. By contrast, in the face of the demands of the interests of minority groups in the industry, if lazy, Flurry big stick of trade protectionism, it will undoubtedly make these excellent market economy and free trade tradition into disrepute.

In fact, the trade protectionism in the United States is also unpopular. US Microsoft founder Bill Gates said, whether it is software, aircraft, or pharmacy, movies, US is the biggest beneficiary of economic globalization, any impediments to international trade moves to the United States are unfavorable. A US study wisdom Kubidesen Institute for International Economics also show that in 2009 the United States had taken a Chinese tire tariffs up to 35%, which led to US consumers within the next few years have to pay $ 1.1 billion for the purchase of additional tires, In fact this is only to protect Americans 1200 jobs.

"For the United States, despite its own to take care of business interests is understandable, but in the face of disagreement or should strengthen communication and consultation with trading partners, and should not be taken frequently blunt, forced sanctions. To China, we also to continue to deepen reform, further rationalize the relationship between government and the market, improve corporate governance, try not to give any excuse for protectionists. further, in the medium and long term we should also further enhance the gold content technology and core competitiveness of Chinese products.

People's Daily: 打压中国钢铁是哪门子市场经济

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