China promises co-operation on steel
China agreed to cooperate more closely with its trading partners on its politically volatile steel exports as leaders of major economies ended a summit Monday with a forceful endorsement of free trade and a crowded agenda that included the Koreas, Syria and refugees.
In a joint statement, Chinese President Xi Jinping, United States President Barack Obama and the leaders of Britain, Japan, Russia and other Group of 20 nations pledged to boost sluggish global growth by promoting innovation.
"The global recovery lacks momentum," Xi told reporters after the meeting. "We need to do more to unlock the potential for medium- and long-term growth."
There was no mention of a global stimulus or other joint action, which officials said earlier was unworkable because economic conditions vary widely from country to country.
In an effort to shore up public support for trade, the leaders promised "inclusive growth" to spread the benefits to people who have been left behind by wrenching change. That reflects a recognition that economic strains are fuelling political tensions and a growing clamour to raise barriers against foreign competition.
The statement expressed "opposition to protectionism on trade and investment in all its forms".
The governments pledged to avoid devaluing their currencies to boost exports. They called for cooperation to reduce tax avoidance. They appealed for stepped-up aid for surging global numbers of refugees and their host countries.
Chinese leaders hope the two-day meeting will increase their influence in managing the global economy.
They want the G-20, created to respond to the 2008 financial crisis, to take on a longer-term role promoting trade and economic growth. The joint statement reflected that ambition by calling it the "premier forum" for economic cooperation.
Beijing made trade a theme of the gathering in this lakeside city southwest of Shanghai but faces complaints that a flood of low-cost Chinese steel into global markets threatens US and European jobs, propelling the rise of political movements that promise to curb trade.
The joint statement calls for formation of a steel forum under the Organisation for Economic Cooperation and Development to study excess production capacity.
In a concession to Beijing, the statement doesn't mention China by name and says excess steel capacity is a global issue. However, US and European officials say the vast Chinese state-owned industry, which accounts for half of worldwide output, is the root of the problem. Washington has hiked import duties by up to 500 per cent on Chinese steel to offset what it says are improper subsidies.
Beijing promised in January to reduce steel production capacity by 100 to 150 million tons by 2020. But that is half of China's estimated excess capacity of 300 million tons, so deeper cuts would be required to bring it in line with demand.
"The market is distorted by subsidies and other support measures, and that is the fundamental problem," said Japanese Prime Minister Shinzo Abe, according to broadcaster NHK.
The president of the European Union's governing body, Jean-Claude Juncker, called Sunday for the G-20 to take action on steel. He said the trade bloc will look at Beijing's response when deciding whether to grant China market economy status, which would make it harder to bring anti-dumping cases.
The steel forum could help to ease strains with Beijing's trading partners, said economist Rajiv Biswas of IHS.
"It may help to reassure countries about tangible steps China is taking," he said.