U.S. to press China to curb industrial output
The Obama administration plans to use annual talks with leaders in Beijing to push for cuts in excess Chinese industrial output, which has inundated foreign markets with discounted steel, aluminum and other products, Treasury Secretary Jacob J. Lew said in Beijing on Sunday ahead of the meeting.
The talks, known as the U.S.-China Strategic and Economic Dialogue, bring together senior American and Chinese officials every year to discuss a broad range of economic, foreign policy and security concerns. On the economic side of the talks, China’s exchange rate controls and intellectual property violations will be high on the American agenda, while North Korea and the South China Sea are expected to dominate the security talks.
But Mr. Lew said the economic track of the meeting in the Chinese capital this year would also take up China’s flood of exports of steel and other products, which have spilled into the international marketplace, provoking anger from producers, unions and politicians.
“Excess capacity is not just a domestic issue,” Mr. Lew told an audience of students and academics at Tsinghua University ahead of the start of the dialogue on Monday.
“The question of excess capacity is one that really has an enormous effect on global markets for things like steel and aluminum,” he said. “We’re seeing distortions in global markets because of excess capacity.”
A senior Chinese official said last week that his side was prepared to discuss excess capacity but was vague about how China would respond.
“We do not shy away from problems,” the official, Zhu Guangyao, a vice minister of finance, told reporters at a briefing. “Anything can be discussed in the economic dialogue.”
Chinese leaders, including President Xi Jinping, have said they will cut back production at steel mills, coal mines and other plants, where capacity far exceeds domestic demand, especially as the economy slows and shifts away from smokestack industries. Mr. Xi has made that part of a program of shifting investment to more rewarding areas that he calls “supply-side structural reform.”
translation: stop dumping tonnes and tonnes of cheap products and materials into first world countries..
“China’s flood of exports of steel and other products, which have spilled into the international marketplace, provoking anger from producers, unions and politicians.”
setting up a patsy for the inevitable crash..