The recent increase of the EU’s steel imports from China is not a harbinger of China flooding European markets with its industrial overcapacities. The steel industry is suffering from global overcapacities, not just China’s. Fears of a disruptive surge of Chinese imports in other industries currently seem overblown.
Steel dumping should not determine the MES debate
The current influx of steel imports from China to the EU is the exception and not a symbol for a general Chinese trend to dump excessive output onto foreign markets. Plagued by global overcapacities and low utilisation rates, including in the EU itself, the steel sector is a special case. China accounts for nearly 50 percent of worldwide crude steel production and demand, so it should be no surprise that the current slowdown in China has repercussions in the industry across the world.
However, the specific circumstances in the steel sector do not lend themselves for drawing parallels with other industries. The data suggest that the recent surge of Chinese exports to Europe is currently contained to steel. The decision over granting MES to China will be a difficult one for many reasons. But it should not be driven by an unrealistic fear of Chinese overcapacities flooding the European market.