U.S. regulators are investigating the theft of American trade secrets from Chinese steelmakers. This development just adds more tension to accusations that Beijing is flooding the world market with low-cost steel. The International Trade Commission was responding to a complaint by America’s Steel Corp., which has said that sensitive information was stolen in 2011 by hackers backed by the Chinese government. Reportedly, U.S. Steel Corp. is requesting retaliatory actions such as blocking the import of alloy steel and carbon produced using the stolen knowledge.
The complaint, made earlier in April 2016, also accuses Chinese steel producers of price collusion and hiding the origin of steel supplies. This has enabled them to flood the American market and destroy competition. In response, China’s Ministry of Commerce opposed the accusations and dismissed them as ‘obvious trade protectionism’. The ministry also said it’d encourage the mentioned companies to stage their defense.
In recent times, Beijing has been facing heightened criticism from both Europe and the United States, who have both accused it of exporting significantly low-priced steel to wipe out backlogs from its home market. This, according to the Western governments, threatens tens of thousands of jobs.
Washington has however taken action against China. Twice over the last few weeks, the U.S. imposed punitive duties targeting steel imports from China. Tem motive behind this was to offset improperly low prices and subsidies. The European Union has also launched an independent investigation into Chinese steel exports earlier May 2016, following extensive protests by the region’s steelworkers. Sell money-losing operations that employ 20, 000 people.
In the UK, Tata Steel blamed cut-throat Chinese competition when it publicized plans to
U.S. Steel Corp. was hacked in 2011 and was one among multiple cyber-attacks highlighted by American prosecutors during the 2014 indictment of 5 Chinese military officers accused of stealing trade secrets from major firms. The Chinese companies mentioned in U.S. Steel’s complaint happen to be some of the largest millers, including Steel Group, Hebei Iron, and Baosteel Group. Reportedly, the stolen info allowed these companies to output advanced high-strength steel that none of them had been able to do before.
The International Trade Commission said that it’d set a date for completion within 45 days of the investigation.
China’s economy has been slowing of late. The emerging economic giant has been trying to cut-down-to-size bloated industries such as coal, steel, cement, solar panel manufacturing and aluminum, whose supplies far exceed demand. This situation has apparently led to cut-throat pricing wars that are leading producers into bankruptcy. The Chinese government is looking to address this situation by encouraging exports and shifting of some operations to foreign countries.