Steel Institute Comments on Report Today on China as a Non-Market Economy

 The American Iron and Steel Institute (AISI) said a report released today by the Center for American Progress(CAP) indicates that economic reforms announced by Chinese leadership last fall will do nothing to mitigate China’s state-ownership and control over key industrial sectors, including steel.

“Government ownership and control of key aspects of the Chinese economy lead to significant economic distortions, including a massive build-up in excess steelmaking capacity in China. The state-run economy prevents normal market forces f-rom operating in China and produces harmful effects in global markets. Private companies in the United States and elsewhe-re can’t compete with foreign governments, and the impact has been seen across the steel industry. Despite the rhetoric f-rom the Chinese government last fall, today’s report reaffirms that these announcements won’t move the needle toward a market economy in China," said Thomas J. Gibson, president at CEO of AISI.

The report f-rom the Washington, D.C. think tank today examined the announced economic reforms underway in China, which were proposed by Chinese leadership as part of the so-called “Third Plenum" meeting of the Communist Party last fall. The detailed analysis indicates that the basic economic institutions in China remain state-controlled and will continue to operate on non-market principles, even if the Third Plenum reforms are implemented as announced. “China’s economy will still operate with broad government involvement in the ownership and control of key industrial sectors and corporate finance, with the Communist Party and the Chinese state retaining authority over key economic decisions," Gibson said. “We hope policymakers and others who can help change this course will take notice of this important research and analysis released today."

The report can be found at www.americanprogress.org.