Statistics show that China exported more than 43 million tons of steel products in 2006, an increase of 109.58 percent year on year, thus becoming one of the major exporters in the world.

   Its products mainly went to the United States, EU and the Republic of Korea.

   The fast increase in iron and steel export had triggered China's trade disputes with its trade partners. Altogether 11 countries had launched 27 anti-dumping and anti-subsidy investigation against China in 2006.

   To reduce trade disputes, China had to adjust the rate of iron and steel products' export rebates, and facts have proven that this conduct is correct and in line with its industrial policy.

   China's energy consumption per unit gross domestic product (GDP) dropped 1.23 percent in 2006, but the aggregate pollutants discharged rose beyond the scheduled target.

   To accomplish the task of saving energy while reducing production costs, the central government will take key measures including adjusting the rate of export rebates. Industry will take the lead in this field and the iron and steel sector bear the brunt.

   A survey finds that most of China's steel products exported belong to high cost, polluted and resource-type products, which are not encouraged by the state for development. The more such enterprises produce, the more the whole industry will suffer.

   To reduce or eliminate the rate of export rebates for some steel products and cut the profits of export-oriented enterprises will keep the prices of steel products in and outside China the same, thus forcing the enterprises to sell their products originally planned for export on the domestic market and strengthen market competition so as to enable large and competent enterprises to become powerful by way of annexation and restructuring.

   According to Zhang Guobao, vice minister in charge of the National Development and Reform   Commission, China is working out a policy to cut the rate of export rebates for a number of  varieties of steel products to zero.

   At present, the rate of export rebates for steel products is eight percent, and the country imposes 10 percent of export tariffs on pig iron and billets.

   Experts here agree that the reduction or elimination of the rate of export rebates will cause reduction of the export of iron and steel in the short run, and force enterprises to shift their attention to developing high-tech and high value-added products.

   Statistics show that the iron and steel industry obtained profits of 170 billion yuan in 2006 and exported more than 43 million tons of steel products.