How China is Involved with the Decline of British Steel
If you’ve seen the news in recent weeks you’ll know the British steel industry is in crisis with Tata steel collapsing. This is putting thousands of jobs on the line and we’re fast approaching the collapse of the UK steel industry itself. Whenever paradigm shifting events like this happen, people are always quick to fire the finger of blame off in all directions and this time it’s largely falling on China(seems as good a place as any). The Chinese ambassador recently had this to say:
“It is regrettable that some people in Britain blame China for what is happening in the British steel industry and accuse China of 'dumping' steels in Britain and pricing local companies out of the steel market”
But is it China’s fault, or can the blame be placed elsewhere?
It’s Not All Bad
The media might make it seem like it’s the steel apocalypse, but is it really as bad as they are making out? The Scunthorpe Tata Steel plant has recently been sold and the Port Talbot plant is currently going through the same process, plus there are many manufacturers and distributors like cannonsteelsltd.co.uk that are still going strong. So we should bear that in mind when discussing this.
Why They’re Getting the Blame
First off, China is the biggest manufacturer of steel in the world by a long way and they are making so much of it that there’s really no need for anyone else to try. China has a lot of people to keep employed and one of the ways to do that is to drop them into factories and what has China got a lot of? Steel factories. Just to back this up with some stats, China produces more in a month than Britain does in a year. Here are the actual numbers for annual export volume in tonnes.
- China: 92,900,000
- UK: 8,600,000
That’s a rather massive difference there and with China monopolising the global steel business, the UK doesn’t really stand a chance and this is the main reason why global steel prices have plummeted deeper than the Mariana Trench.
Is it Really Their Fault
Can you blame them for wanting to keep their national’s employed? Well, no, but you can blame them for selling their steel off so cheaply around the world that it further stymies the global production power of the rest of the world. But, they aren’t solely to blame for the state of the UK’s steel industry, as part of the blame also comes from considerable underinvestment as well as the Great British Pound being such a strong currency. UK firms have to spend a lot more for the basics than a company in a country with a weaker currency, but getting similar income, which ultimately means less profit.
So the ambassador is wrong, as the majority of the blame must fall at China as it’s clear from the evidence that their pricing and over manufacturing is slowly destroying the global steel industry.
