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China urged to fix 'life or death' steel crisis

[BRUSSELS] Major players in the world's struggling steel industry urged China on Monday to scale back overproduction blamed for causing plant closures and job losses across the globe.

Ministers and representatives from 30 countries gathered in Brussels in a bid to end the row pitting the world steel industry against China, where an economic slowdown has unleashed a glut of cheap steel onto the world market.

"We will tell our Chinese partners... you do not respect the rules governing world trade," said French Economy Minister Emmanuel Macron ahead of the talks, organised by the Belgian government and the OECD.

"That is inexplicable for our workers, it is inexplicable for our industry," he said.

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China produces more than half of the globe's steel output and is accused of flooding the world market with oversupply sold at below cost in violation of global trade rules.

Indian giant Tata Steel put its loss-making British operation up for sale last month leaving thousands of jobs at risk, in the latest example of the crisis.

"The discussion today with all these countries coming together is something that we pushed for and... China's participation will help make the difference," Britain's business minister, Sajid Javid, said on the sidelines of the talks, which are closed to the press.

China is represented by Assistant Trade Minister Ji Zhang and a large group of officials, but more senior figures stayed home.

The OECD, the grouping of world industrialised countries, plans to issue a joint statement at the end of the talks that would demonstrate a joint willingness to solve the crisis.

But a source told AFP that tempers were high, and a positive outcome remained uncertain.

Angry steel manufacturers in Europe have urged the EU, the second biggest producer in the world, to mirror the United States in punishing China with harsh tariffs.

The US in March slapped tarrifs of nearly 300 per cent on so-called cold rolled steel, used to make auto parts, but the EU settled on a more cautious 20 per cent for the same product.

The EU currently has dozens of anti-dumping measures in place against China, several involving the steel industry, but critics argue these are not enough.

At the talks, EU's Trade Commissioner Cecilia Malmstroem said the steel crisis was "now life or death for many companies", but that tariffs were "only a short-term bandage".

"Healing the sector's wounds requires sustained international cooperation leading to effective reform," she said, in an address made available to journalists.

China made no official declaration before the talks, but an editorial by the official Xinhua news agency accused governments of embracing protectionism which will damage the global economy.

"Blaming other countries is always an easy, sure-fire way for politicians to whip up a storm over domestic economic woes, but finger-pointing and protectionism are counter-productive," the editorial said.

"The last thing the world needs is a trade war over this issue," it added.

Chinese steel output rose in March, official data showed last week, despite repeated pledges by the world's top producer to cut capacity.