New Report Exposes China’s Steel Subsidy Tactics, Highlights Market Manipulation

Wiley Rein LLP, a prominent Washington, D.C.-based law firm, has released a report titled “Shell Game: Case Studies in Chinese Steel Subsidies,” which critically examines China’s steel industry and its unfulfilled economic reform promises. The report, authored by International Trade Practice co-chair Alan H. Price, partner Robert E. DeFrancesco, and counsel Adam M. Teslik, highlights the disconnect between China’s policy rhetoric and its industry practices.

Read also: Mixed Signals from China’s Shipping Container Trading and Leasing Markets

“Despite the bold claims of ‘reform’ in China,” said Price, “our research shows that the Chinese steel industry remains under significant government control, with little evidence of a true shift towards market-driven practices.”

The report focuses on China’s steel industry during its 13th and 14th five-year plans (2016-2020; 2021-2025), identifying persistent government involvement and subsidies. Through case studies of three steel companies, the authors demonstrate how state-directed mergers, relocations, and financial backing have led to excess capacity and market distortions. While China pledges to reduce overcapacity, its policies instead shield the industry from market forces, aggravating global steel market imbalances.

Robert E. DeFrancesco emphasized, “Our examination revealed a pattern of central and local government intervention, which undermines efforts to adopt market-based solutions and contributes to overcapacity and pricing disruptions on a global scale.”

The report underscores the urgent need for more effective alignment between China’s policies and its actions in the steel sector, calling attention to the broader implications for global trade.

Read the full report here.

_{Images are for reference only.Images and contents gathered automatic from google or 3rd party sources.All rights on the images and contents are with their legal original owners.}