Abstract:Based on a comparison of the development of steel industry,foreign trade and capacity transformation between China and Europe,this report first describes the background of the steel trade dispute between the two sides,the reasons for excess capacity in China and possible solutions for the problem. Secondly,from the perspective of specific countries and products,this report analyzes the current situation of the steel trade in China and Europe. Thirdly,a comparison of the steel products’ international competitiveness between China and Europe is made,which provides a theoretical viewpoint for understanding the steel dispute between China and Europe. Last but not least,this report explains the outcome of and causes for the EU’s trade remedy investigations into Chinese steel products. The analysis ends with the following conclusions. First,the steel industry dilemma that China and Europe are facing respectively are different in that Chinese steel products sell well on the global market and it takes great efforts to cut capacity,while the EU’s export of steel products is weak and it takes less efforts to cut capacity. Second,the recent years have witnessed a great improvement of international competitiveness of China’s steel products,and as a result,the demand and dependence of China’s steel products towards the EU market has sharply declined. By contrast,the EU is increasing its dependence on the Chinese market. As the steel trade structure between China and Europe is converging,China doesn’t satisfy the motives,logics or conditions for dumping to the EU. Third,against the background of weak global demand,the global competitiveness of Chinese steel products improves constantly and their market share is expanding,which contrasts with the declining global competitiveness and continuous decrease of market share of the EU’s steel products. Consequently,adopting the “surrogate country” approach is more convenient for the EU to launch the trade remedy measures.
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