Britain asked China yesterday to hurry up in tackling overcapacity in its steel industry, hoping to stem the flood of cheap imports into Europe which India’s Tata Steel has blamed for its decision to pull out of the United Kingdom, putting 15,000 jobs at risk.
Tata put its entire UK business up for sale last month, including its flagship production plant at Port Talbot in south Wales, saying it could no longer endure mounting losses caused by increased imports to Europe from countries like China, high manufacturing costs and domestic market weakness.
“I urged China to accelerate its efforts to reduce levels of steel production,” Britain’s Foreign Secretary Philip Hammond said in a statement issued after he met with his Chinese counterpart Wang Yi in Beijing.
“The UK’s focus is on finding a long-term sustainable future for steelmaking at Port Talbot and across the UK and I welcomed the potential interest of Chinese companies in investment in UK steelmaking,” Hammond said.
The global steel industry is suffering from overcapacity as a slowdown in growth in the Chinese economy has reduced domestic demand.
China, which produces half of the world’s steel, as well as Russia have responded by diverting more of their output to markets like Europe, sending prices plummeting.
The European Union opened three anti-dumping investigations into Chinese steel products in February and imposed new duties on imports after the European steel industry said thousands of jobs were at stake.
China said earlier yesterday that plans to shut steel mills over the next five years would cut capacity to an estimated 1.13bn tonnes by 2020, which is still far in excess of the country’s needs.
A statement released by China’s Foreign Ministry about Wang’s meeting with Hammond made no mention of the steel issue.
Instead it reported Wang as telling Hammond that Hong Kong’s  affairs are China’s internal affairs and that Beijing is committed to Hong Kong’s government system where it is granted a high degree of autonomy under the “one country, two systems” model.
Visiting the former British colony on Friday, Hammond had said a Hong Kong bookseller who disappeared from the city under mysterious circumstances last year had been removed under duress and that the business community was “unnerved”.
Wang also called for this weekend’s meeting of G7 foreign ministers in Japan, where Hammond is heading next, not to “hype up” the South China Sea issue.
China has rattled nerves in the region with its increasingly assertive moves in the disputed waters, where Brunei, Malaysia, the Philippines, Taiwan and Vietnam all have competing claims.

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