China Takes a Pledge to downsize its Excess Industrial Production

The Chinese administration has recently vowed to continue downsizing steel and coal capacity, which have been a factor of trade friction with various countries. The decision comes at a time when the Chinese premier Xi Jinping prepares to attend the World Economic Forum in Davos, Switzerland, held annually for the first time.

In 2016, China was able to reach its target capacity suggested by authorities of the National Development and Reform Commission. A massive number of steel and coal workers have been allocated to other jobs. Other industrial domains such as glass and cement are also swiftly checking on capacity.

China has been criticized the many of its trade partners of dumping excess coal, glass steel, and cement in the international at below standard rates. Donald Trump has been at the forefront of taking a nudge at Chinese manufacturers accusing them of practising unfair trade and threaten to launch tariff punishment. However, the Chinese authorities are prepared to respond and call for an antitrust motion against U.S. companies in China. In addition, the Chinese believe that it is normal to have policy differences on trade issues and urged the US to resolve these issues by bilateral talks and respect each other’s consensus.

A harmonious bonding between U.S.-China is crucial for the global economy to run at smooth pace and something highly regarded by the international community. China says it is actively focusing on production roll back and close loss-making and debt-laden producers that are a burden on the country’s economy itself. However, political disagreement and resistance coupled with concerns over social stability and unemployment are the major challenges faced by the country in reaching its goals.

The task is expected to get even more difficult this year, but the nation will remain focused on achieving its target. Meanwhile, China’s growing exports of aluminum are a nuisance for the Western market, but the international market has been so far kept at a balance.  Overseas players state that regulators are the major bumps restricting their growth in China.

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