Chinese Steel Industry Production Up Despite A Declining Economy
The Wall Street Journal and The Washington Post last week both highlighted the fact that, despite a weakening economy, Chinese state-owned steel companies have increased output over the last several months. The Post said China’s “state-owned steel mills, which produce as much steel as the rest of the world combined, haven’t slowed down to match demand … which means the rest of the world has been flooded with cheap Chinese steel.” Indeed, steel exports from China have nearly doubled in the last four years and were up 40 percent alone between January 2014 and January 2015. Chinese steels exports to the U.S. were up 68 percent in 2014.
Compounding the issue, according to The Journal, is ongoing currency manipulation by China and the fact that “China’s steelmakers benefit from relatively low-cost labor and inputs such as coking coal.” The glut of Chinese steel has led many U.S. companies to lay off workers and to renew calls on the federal government to impose additional tariffs on Chinese-made steel.
Meanwhile, an Economic Policy Institute study released last week showed how overall imports from China (not just steel imports) harm American workers. According to EPI:
- The growth of U.S. imports from China between 2001 and 2011 displaced nearly 3.3 million U.S. jobs;
- Total wage losses due to trade with China were $37.0 billion in 2011;
- The displacement of manufacturing jobs by growing U.S. trade deficits with China has been particularly hard on minority workers: 958,800 were displaced, with wage-related losses in 2011 of $10,485 per worker and $10.1 billion overall.
Additionally, Bloomberg reported last week that aluminum output is also up in China. Aluminum product output rose 21 percent in the first two months of 2015 from the same period a year before.