It is crucial for China to set up a mechanism to monitor overcapacity in the steel sector and detect its causes, European Commission President Jean-Claude Juncker said Sunday, adding that he is determined to defend the interests of the European steel industry and its workers.
"This summit must urgently find a solution to the problems facing the steel industry," Juncker said at a joint news conference ahead of the G20 summit on Sunday, according to a press release published Sunday on the official website of the European Commission.[Special Coverage]
He also said it was "unacceptable" that the European steel industry has lost so many jobs in recent years, according to Reuters.
"The EU has long criticized China's steel overcapacity since the steel industry in the EU is less competitive due to its high costs and relatively small scale compared to China," said Bai Ming, a research fellow at the Chinese Academy of International Trade and Economic Cooperation.
Bai said it is unfair to blame China for the country's overcapacity, which is actually a result of the global economic slump.
Imports of Chinese steel to the EU have increased from 4.5 million tons in 2014 to an estimated 7 million tons in 2015, said an April report by The Parliament, a magazine covering EU Parliament news.
At a news conference held after the EU-China business summit in July, Juncker said China's steel overcapacity will be a factor in the European Commission's debate about China's market economy status.
China is also seeking to reduce overcapacity since it wants to fulfill its obligation to secure a safe future for the steel industry and realize the structural transformation of the nation's economy, said Bai.
China has shut down steel factories with a total capacity of over 90 million tons over the past five years. and plans to reduce this by an additional 100 million to 150 million tons by 2020, the Xinhua News Agency reported in June.
Bai noted, however, that China cannot simply close all of its unproductive steel factories overnight. He added that instead of letting the EU independently determine the steel production quota, China and the EU should settle the issue together.