China Agrees To Address Steel Overcapacity
As The Associated Press reported, at the conclusion of the United States and China’s two-day Strategic and Economic Dialogue last week, China promised to address its excess production of steel, but did not promise to take any action on aluminum overcapacity. (In an online column, former U.S. Sen. Mary Landrieu did address that issue.)
After the meetings, U.S. Treasury Secretary Jack Lew said, “While efforts over the past several days cannot resolve our concerns, they do represent real progress.” Specifically, China said it would follow through on plans to “shrink” its state-owned steel companies. Secretary Lew explained that China “promised to avoid policies that might encourage steel production growth and to wind down financially moribund ‘zombie companies’” and that “ Chinese officials also agreed to cooperate in a possible global steel forum to discuss industry issues.” Secretary Lew also said China promised not to “engage in ‘competitive devaluations’ or use the exchange rate to help China's exporters.”
Secretary Lew will have more to say on the U.S.-China economic relationship next Thursday in remarks in Washington, DC at the American Enterprise Institute. Click here to watch.