Protectionism won’t resolve overcapacity: MOFCOM
China's steel exports account for less than 2 percent of the Brazilian market, and trade protectionism will not help tackle the overcapacity issue, an official from China's Ministry of Commerce (MOFCOM) said on Tuesday morning.
His comment followed an investigation launched on Monday (Brazil time) by the Brazilian Department of Foreign Trade under the Ministry of Industry, Trade and Services, involving hot-rolled products from China.
Over the past five years, Brazil has launched 14 anti-subsidy investigations into Chinese-made steel products, Wang Hejun, director of MOFCOM's trade remedy and investigation bureau, was quoted as saying in a post published on the ministry's website on Tuesday.
"Brazil has adopted restrictive measures in many of those cases, but this is the first time the country launched a (countervailing duty) probe against China," Wang said.
As members of the G20, China and Brazil should both take responsibility in slashing steel overcapacity, Wang noted. "Chinese products account for less than 2 percent of the Brazilian market, and protectionism won't solve the problem," he said.
China's exports of hot-rolled steel plates in 2014 totaled 259,700 tons, according to data complied by Beijing-based industry information provider the Lange Steel Information Center.
Exports fell to 139,300 tons in 2015, the data showed. From January to September this year, China exported 65,800 tons of hot-rolled steel plates to Brazil.
This is the first time Brazil launched a countervailing duty probe into Chinese exports, a move that will affect China-Brazil cooperation, Wang Guoqing, director of the Lange Steel Information Center, told the Global Times on Tuesday.
"The two countries have close business and cooperation ties in terms of the steel industry. For example, China imported 192 million tons of iron ore from Brazil, which accounted for 20 percent of its total imports," she said, noting that Brazil's move will hurt the bilateral trade relationship.
Brazil has launched more and more trade protective measures against Chinese imports in recent years, reports said.
For example, the Brazilian government initiated in September 2015 an anti-dumping investigation against imports of non-alloy carbon steel pipes from China, based on an alleged dumping margin of 105.6 percent, according to media reports.?
Three months later, it launched another one on hot-rolled flat steel bars from China, media reports noted.
Those moves are serious cases of trade protectionism, Li Xinchuang, vice president of the China Iron & Steel Association, told the Global Times on Tuesday.
"They are trying to protect their low-end industry, and the local downstream business will lose competitiveness," he said, noting that the moves will also hurt the local economy.