The EU-China "Steel Contact Group" met yesterday in Beijing to discuss the causes and seek sustainable solutions to the serious challenges faced by the steel sector. As the world’s largest steel producer China has an important role to play in the solution of the global overcapacity.

The EU welcomed China's willingness to find solutions through dialogue and collaboration with trade partners. These dialogues should be efficient and allow concrete achievements.

The goal of the meeting was to discuss the ways in which sustainable solutions for the overcapacity could be found, focusing on the state of play of capacity reduction, the newly adopted capacity reduction targets, the subsidisation policies, the behaviour and financing of the state owned enterprises.

While this discussion did bring some clarifications on the capacity reduction targets and the concrete ways to find solutions, significant work remains to be done and both sides agreed to intensify the dialogue to this end. The EU underlined the importance of addressing trade distortions in an urgent and effective manner.

This was the ninth Steel Contact Group meeting between the EU and China. Substantial discussions on the overcapacity problem and the restructuring of the steel industry have already taken place in the past in this bilateral forum. China has already recognised the existence of excess capacity and announced its intention to tackle the problem. Several policy instruments to deal with the issue have already been adopted by the Chinese authorities and have been subject of discussions in this bilateral forum.

In addition to measures aiming to mitigate the effects of global overcapacities, the Commission is adressing the underlying causes of the problem with our main partners. At bilateral level, the Commission has set up Steel Contact Group meetings with China, Japan, India, Russia, Turkey and the United States. At multilateral level, the Commission plays an active role in the OECD Steel Committee, it will actively raise this issue at the WTO level.