Workers and world trade in general are being harmed by excess industrial capacity.
That’s the consensus of trade ministers from the G20 group of industrial and developing economies after meeting in China, the Wall Street Journal reports.
The declaration cast a spotlight on China’s influence as the world’s largest exporter of manufactured goods such as steel.
The Shanghai meeting sought to address what Chinese Minister of Commerce Gao Hucheng called a “very sluggish recovery” marked by growing protectionism, reduced foreign direct investment and other signs of fragmentation in the global trading system.
Together, they risk making 2016 the fifth straight year that international commerce lags behind global growth, he said.
Gao said China had made trade negotiations a key plank of its G20 presidency this year and that trade ministers over the weekend agreed to a nine-point set of principles aimed at spurring cross-border investment.
“We do have the responsibility to stimulate trade and investment as a contribution to a new vitality to the world economy,” he said.
The reference to excess capacity in the weekend’s closing statement stopped short of blaming any specific nation.
It does, however, add a new layer of international pressure on China.
Almost 15 years after China joined the World Trade Organization, many of its global trading partners want Beijing to deal more effectively with its high production of steel, aluminum, chemicals, cotton and polyester, which runs ahead of demand and is flooding markets overseas.
The only industry the statement specifically described as experiencing excess capacity was steel. However, a key complaint by the US and Europe is that China’s steel output—which accounts for about half of global production — is being dumped on world markets below cost.
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