China’s Stainless Steel Producers Accused of Wrongful Subsidizing

China’s Stainless Steel Producers Accused of Wrongful Subsidizing

The Specialty Steel Industry of North America (SSINA) has alleged that Chinese government has spent the last 10 years breaking international and United States trade rules with its policy of bestowing preferred status upon its stainless steel industry and providing it with a wide range of preferential treatment programs and direct subsidies.

The report that SSINA cites further alleges that the Chinese intend to continue to expand their stainless steel industry through government subsidizing at an alarming rate of growth.

The report was compiled by the Washington, D.C. law firm Kelly, Drye, Collier, Shannon.

Earlier in the summer, the American Iron and Steel Institute cited a report to accuse China of violating its own obligations to the World Trade Organization. The report detailed that $50 billion US given to Chinese stainless steel producers by the government has undermined all of that nation’s competitors and violated international trade agreements.

In that report, it is detailed also that there is extensive state-ownership of the stainless steel industry in China, leading to a distortion of the steel industry global marketplace.

The Chinese have denied the allegations of violating any obligations to or agreements with the WTO.

Earlier this month, the China Iron and Steel Association stated that privately-owned steelmakers in that nation produced 127 million tons and accounted for 36% of total crude steel production in China in 2005, in sharp contrast with the AISI accusation that the top 20 state-owned mills actually control 91% of production.

United States lawmakers and other government officials have held talks with the Chinese government concerning what the U.S. interprets as massive subsidizing of private industry, in addition to the matter of keeping the Yuan artificially low in order to make Chinese exports cheaper than the goods of its competitors. The Chinese economy has been exploding in the last few years under new free-market initiatives, but the government is accused of unfair international trade practices.

“Today, the U.S. stainless steel industry remains healthy and competitive, even in the face of such egregious unfair Chinese government practices as massive cash infusions and forgiveness of debt for its stainless steel industry. But many U.S. manufacturers that would otherwise be competitive but for subsidized competition from China are being forced out of business. SSINA members recognize the importance of being able to address Chinese subsidies in the future should the need arise. The industry will continue to do our research and show how China is playing by its own rules, and not those of the international community, to the detriment of all trading partners,” said SSINA Chairman Doug Kittenbrink.

Specialty Steel Industry of North America (PR Newswire), “Updated Study Alleges Unfair Trade Advantages Conferred on China’s Stainless Steel Producers”


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