At the opening session of the eighth round of US-China Strategic and Economic Dialogue held in Beijing, Jacob Lew, the US Treasury Secretary, has urged China to reduce excess industrial capacity, improve data and regulatory transparency, and lower barriers to trade and investment.
Mr. Lew stated that, consistent with China’s reform agenda, the US supports efforts to reduce excess capacity and leverage in the economy, and allow market forces to determine the allocation of resources. Excess capacity has a distorting and damaging effect on global markets, and implementing policies to substantially reduce production in a range of sectors suffering from overcapacity, including steel and aluminum, is critical to the function and stability of international markets, the US Treasury Secretary said.
At the beginning of this year, China announced that it will cut crude steel production capacity by 100-150 million mt and reduce the size of its coal industry to ease the problems of excess capacity in the steel and coal industries.