Britain urges China to cut steel production

Britain's Foreign Secretary Philip Hammond (left) talks with his Chinese counterpart Wang Yi in Beijing on April 9, 2016.
Britain's Foreign Secretary Philip Hammond (left) talks with his Chinese counterpart Wang Yi in Beijing on April 9, 2016.PHOTO: AFP

HONG KONG (AFP) - British Foreign Secretary Philip Hammond on Saturday (April 9) urged China to reduce its steel production levels as the UK grapples with an industry crisis that could see thousands of jobs lost.

Speaking with Chinese Foreign Minister Wang Yi in Beijing, en route to Hiroshima for the G7 Foreign Ministers' meeting, Hammond expressed his concerns about steel over-capacity.

India's Tata Steel announced last month it was selling some or all of its loss-making British operations including the Port Talbot works in Wales, putting 15,000 jobs at risk and triggering doom-laden warnings of worse to come for Europe's steel industry.

It cited cheap imports to Europe from China, as well as global oversupply, high costs and currency volatility as reasons for rapidly-deteriorating trading conditions.

"I urged China to accelerate its efforts to reduce levels of steel production," a foreign ministry statement quoted Hammond as saying.

"The UK's focus is on finding a long-term sustainable future for steel making at Port Talbot and across the UK, and I welcomed the potential interest of Chinese companies in investment in UK steel-making." A glut of cheap Chinese imports is a major reason why world steel prices have plunged in recent years - and why Port Talbot is now reportedly losing some £1 million (S$1.9 million) a day.

Prime Minister David Cameron's government has faced damaging claims that its push for closer ties with China is holding back efforts to save steel jobs.

It has been racing to find a buyer for Tata as pressure grows from the opposition, the trade unions and the press to safeguard the iconic British steel industry which dates back to the 19th century.

Tata will start the process of selling its British steel assets by Monday (April 11), the UK government's business minister Sajid Javid said earlier this week after holding talks with the firm in Mumbai.

Hammond also discussed with Wang the case of a Hong Kong bookseller who went missing last year along with four other colleagues, only to surface in China.

The men all worked for the Mighty Current publishing house in Hong Kong, famous for salacious titles about senior Chinese politicians, but the case of Lee Bo has caused the greatest outcry as he was the only one to disappear from Hong Kong.

London has termed Lee's case a "serious breach" of the joint agreement made before Britain handed Hong Kong back to China in 1997 which guaranteed its freedoms for 50 years.

Hammond said Friday Britain had the "obligation and right" to safeguard Hong Kong's autonomy as he visited the city where fears are growing that Beijing's grip is tightening.

"The UK's relationship with China is a strategic partnership and we've acknowledged on both sides that such a relationship enables us to raise difficult issues and to discuss them together. In that spirit we discussed the UK's continued concerns over the booksellers' case and Mr Lee Po (Bo)." Hammond's trip to China comes as part an East Asian Tour, with Hiroshima his next stop followed by Vietnam. The two-day G7 meeting begins Sunday and is also being attended by diplomats from France, Canada, Germany, Italy and Japan.