EU plans new sanctions on China's steel sector

China's refusal to curb its steel production could prompt the European Union to consider new trade sanctions against Beijing. The European Commission has said it is joining the United States in swiftly addressing such issues.

Until now, China is the world's largest steel producer. China's annual steel production is almost double the EU's total production. Western governments say Chinese steel exports have triggered a global steel market crisis that has resulted in job losses and plant closures.

In an EU document aimed at shaping the bloc's policy towards China over the next five years, the Commission called on Beijing to reduce its crude steel capacity to 150 million tonnes by 2020.

The European Commission is currently conducting seven ongoing investigations into Chinese steel imports following the opening of a new case over alleged subsidies for hot rolled flat products in May.

Steel exports from China rose 6.4 percent to 46.28 million tons in the first five months of this year, according to Chinese data. The United States imposed import duties on Chinese steel products last month.

China denies causing global glut, but the United States and the EU have accused Beijing of maintaining unprofitable subsidized factories in order to avoid massive job losses as the Chinese economy slows.

"Subsidies and other government support measures that help expand exports or steel capacity, or sustain unprofitable operations, should be eliminated as soon as possible," the EU document says.