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European Commission - Speech - [Check Against Delivery]

Remarks by Jean-Claude JUNCKER, President of the EC, at the joint press conference with Donald TUSK, European Council President, in Beijing, China

Beijing, 13 July 2016

Good afternoon,

I am very happy to be back in China. My first visit goes back to 1996 as Prime Minister of Luxembourg. I came back to this country during my nineteen years in office again and again - seven or eight or nine times, I do not know exactly. And I am still impressed by the huge progress this country is making.

I focused on the parts of the debate I was in charge of. There are two main issues that were mentioned by the President of the Commission: overcapacity in the steel sector and market economy status for China. As concerns the overcapacity in steel production, I was explaining to our Chinese counterparts that it is a very serious problem for Europe and for the Europeans. The overcapacity of China is exactly twice the entire steel production of Europe, which is demonstrating what kind of problem we have to face. I was explaining to our Chinese colleagues that we, as Europeans, are used to this painful adjustment process - in particular industrial sectors and mainly steel. In the second half of the '70s and in the first half of the '80s, we had to go through that process in Europe because the overcapacity in steel production was huge during that period and we had to adopt the plan, the so-called Davignon Plan, which imposed production quotas on the European steel industry and which imposed minimum steel prices. We lost ten thousands of our jobs in my country, Luxembourg, of which I am no longer Prime Minister but I am talking about things I know best. We lost 80% of the jobs in the steel industry, so I know what this is about. I know how painful this adjustment process can be and I have some understanding for the problems our Chinese friends are facing when it comes to the reduction of steel production in China, when it comes to the closing of steel plants. And when we are saying that market rules have to apply, the Chinese know exactly that this, in concrete terms, means the closing down of steel plants. This is a difficult subject for us, this is an as difficult subject for the Chinese partners and we agreed this morning to establish a common working group, a kind of steel platform between China and the European Union to keep alive the debates and the discussions we have related to the steel overproduction and we would like this platform, this working group to be dealing with verification and monitoring mechanisms. And we would like this group - or this platform - to have a look in depth into the possibilities which could exist in order to bring this problem to a good end.

As far as the market economy status for China is concerned, I was explaining that the Commission has not made up its mind. We will have an orientation debate on 20 July, this year. We will stick to our international obligations, this is beyond doubt. But there too, I have to say, this is a very difficult issue. And for the time being, the Commission is finalising an impact assessment of the consequences entailed by the end of Article 15 of the WTO accession agreement with China. And when this is done, we will check certain numbers of options and then we will make our decision. I do not want to dramatise this issue, although it could easily be dramatised. But for us there is a clear link between the steel overcapacity of China and the market economy status for China.

Thank you.

SPEECH/16/2523

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