Chinas Steel Industry and Its Impact on the United States: Issues for Congress, Rachel Tang, Analyst in Industrial Organization and Business, September 21, 2010
steel, nearly half of the worlds steel. That was 10 times the U.S. production. The majority of Chinese steel has been used to meet domestic demand in China. However, as its steel production continues to grow, overcapacity is becoming a major concern to Chinese industrial policy makers, as well as steelmakers outside China. Although industry statistics indicate that the Chinese steel industry is not export-oriented, its consistently high output keeps U.S. steelmakers concerned that excess Chinese steel might overwhelm the global market once domestic demand is adequately met. These concerns become increasingly acute as the United States and the rest of the world are in the middle of a slow recovery from the economic recession started in December 2007. The Chinese steel industry is highly fragmented, with more than 1,000 steel producers, which makes the domestic market highly competitive and difficult to control. Its growth also faces constraints such as dependence on imported iron ore and high energy consumption. The Chinese government has shown interest in stepping up its efforts to rein in steel overcapacity and to consolidate and restructure the steel industry. However, it remains to be seen if the governments efforts and measures are to produce sufficient or meaningful results.”
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