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Chinese dumping of low cost steel remains problem, says Hammond

Published 10/11/2016

Theresa May, pictured here with Chinese President Xi Jinping, said she was excited about the opportunities for expanding trade and investment
Theresa May, pictured here with Chinese President Xi Jinping, said she was excited about the opportunities for expanding trade and investment

Chinese dumping of low cost steel on the international market is still a problem, Chancellor Philip Hammond has said.

Mr Hammond acknowledged work that China has done to reduce its overall output but insisted European Union countries still need to find a way to protect themselves against "market distorting trade patterns".

Steel dumping has been partially blamed for the crisis engulfing Britain's industry and Mr Hammond raised the issue during talks with Chinese vice premier Ma Kai in London.

After announcing a raft of measures on infrastructure investment and closer financial cooperation between the UK and China, Mr Hammond told a press conference at Lancaster House, central London: "We have discussed the challenges of the steel industry, but I have discussed them many times with Chinese interlocutors, not only in this role but in my previous role as Foreign Secretary .

"There is of course a huge global surplus of steel capacity.

"China has in fact made significant reductions in its overall steel output but there is still a problem.

"It's important that we have effective and sustainable trade protection mechanisms that do deliver the protection we need against unfair trade and the low-cost dumping.

"We've seen measures that the EU has applied to Chinese steel being highly effective, reducing levels of imports very dramatically."

He said it was important the EU complies with international obligations and develops "a sustainable model of dealing with market distorting trade patterns".

Mr Hammond repeatedly hailed a "golden era" in UK-Sino relations as he set out agreements reached during the eighth UK-China Economic and Financial Dialogue (EFD).

Among the measures announced on Thursday are a move to the next stage of research in plans to link the London and Shanghai stock exchanges.

China has also agreed to gradually raise the 50% limit on foreign ownership for securities and mutual fund companies to give British firms greater freedom to operate in China.

A UK-China FinTech bridge to strengthen regulatory cooperation will be established, and a number of measures on green finance were also announced.

In addition, a number of Chinese financial companies will open offices in London, including insurance company China Life, the China Foreign Exchange Trade System and Shanghai Clearing House.

Mr Hammond said: "Our strategic collaboration and the announcements I've just described are evidence of the continued strengths of this relationship.

"This eight Economic and Financial Dialogue sets the foundation for a new chapter in our partnership.

"I look forward to working with vice premier Ma to give effect to our commitments and thus contribute to delivering a golden era in UK-China relations."

Mr Ma said: "This year marks the beginning of the golden era of China-UK relations and next year will mark the 45th anniversary of the ambassadorial diplomatic relations between our two countries.

"Our economic cooperation is now standing at a new historical starting point, it is full of opportunities and so much can be done.

"We will continue to use the EFD to continuously deepen our comprehensive cooperation in economy and trade, jointly advance our global comprehensive strategic partnership and bring more and greater benefits to our people."

The move has been seen as a fresh attempt to reassure the Chinese after a rocky start to relations under Theresa May.

One of her first acts on becoming Prime Minister last July was to order a review of the project to build the new Hinkley Point C nuclear power plant - part-financed by the Chinese - to the intense annoyance of Beijing.

But having finally given the green light to the plant last September, Mrs May has again echoed the deal's architect, former chancellor George Osborne, in speaking of a "golden era" in Sino-UK relations.

Ministers also used the talks to showcase another aspect of Mr Osborne's legacy which Mrs May had previously shown little enthusiasm for, with the unveiling of a Northern Powerhouse investment portfolio.

The prospectus will set out details of 13 large-scale property and infrastructure development projects across northern England - each worth more than £100 million - in an attempt to attract Chinese investors.

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