Over the past few 6-7 years, China has been flooding the international market with heavily-subsidized steel. This has led to a continuous drop in steel prices as well as a steady rise in the quantity of steel exported by China. See the graph below.
Graph
showing Chinese steel exports rising while prices declining. Source: U.S. Steel
As a result, many steel mills from South Africa
to Great Britain to North America suffered enormous losses and had to close down. With each closure, a large pool of steel
mill workers was laid off. To protect its steel industry, the US government has
imposed duties on certain types of steel products to prevent the dumping activities.
According to an article published in Huffington Post, the Chinese producers
are circumventing this restriction by routing their steel export thru neighboring
countries, including Malaysia.
Many people do not see the problem in heavily-subsidized Chinese steel
exports. The argument put forward for welcoming this cheap steel is
either they are good for local industries (think cheap house prices) or
that the local producers are simply inefficient. The low prices quoted
are not a reflection of the efficiency or inefficiency of the producers,
but the deliberate measures taken by the Chinese government to ensure
the continued operation of its large loss-making steel mills which
employ million of workers.
I hope that our government will look into the complaint of dumping activities by Chinese steel producers as well as putting a stop to the use of our ports as transshipment hubs for the export of Chinese steel products to other countries. Remember the old saying: Don't do unto others what you wouldn't have them do unto you.
http://nexttrade.blogspot.my/2016/05/malaysia-transhipment-hub-for-chinese.html
