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Report on Implications for Global Trade of a Downturn in Steel Production in China

   

Added on  2020-04-15

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Running head: IMPLICATIONS OF GLOBAL TRADE OF A DOWNTURN IN STEELPRODUCTION IN CHINAImplications for global trade of a downturn in steel production in ChinaName of the Student:Name of the University:Author Note:

2IMPLICATIONS OF GLOBAL TRADE OF A DOWNTURN IN STEEL PRODUCTION INCHINAContentsIntroduction......................................................................................................................................3Discussion........................................................................................................................................3China’s economic downturn and steel production.......................................................................3Export and import of iron ore and its economic downturn..........................................................9Conclusion.....................................................................................................................................11References......................................................................................................................................12

3IMPLICATIONS OF GLOBAL TRADE OF A DOWNTURN IN STEEL PRODUCTION INCHINAIntroductionThe current economic situation have focused on internal consumption rather than theexports of the country and it ahs consequences beyond the borders. This is because China’seconomy is more integrated with the economy of the world in terms of trade and investments.China’s import of resources has contributed to price boom of the global commodities. Thecurrent economic situation has intended to focus on the internal consumption of goods than theexports of manufactured goods. The reforms implied that the import of resources were very lessand China has showed a growing interest in the import of steel, copper, coal and other mineralproducts which are important for the urbanization of the country. This is considered to be themajor priority for China and the higher authorities are trying to bridge the gap between the ruraland urban areas in the country through inland infrastructure development projects. These projectsrequire a large quantity of metal and mineral products. Moreover, the modernization of railwaysystem in China also requires a considerable amount of steel. This paper will highlight theimplications of global economic downturn in steel production in China. It will also discuss thesteel and iron ore resources in China. In order to secure the mineral products to greentechnologies for long-term period, China will import significant quantities of rare earth fromother countries. Moreover, the domestic supplier helps in making the country one of the largestreserve of mineral resources in the world (Roberts et al. 2016).

4IMPLICATIONS OF GLOBAL TRADE OF A DOWNTURN IN STEEL PRODUCTION INCHINADiscussionChina’s economic downturn and steel production China has devalued the currency so that it can boost its exports and this is considered asthe backbone of the economy. This devaluation is considered as strategic and it contributed toreactivate China’s export and the economic growth of the country. Moreover, economic growthis 10 % p.a. for the last three decades. The steel market conditions are improving in manyregions in China, however the crisis is continuing in some regions. Growth in the production ofsteel is declining significantly over the past three decades. It has shown a sharp decline duringthe first months of 2016, however the decline is diminishing after March, 2016. The prices ofsteel are responding positively to gradual upturn in the production during the first half of 2016although there was abundance supply (Oecd.org 2017). After the decline in steel production in 2015, the demand for steel products has shownconsiderable signs of recovery during the first three months of 2016. The year-on-yearconsumption of steel has rebounded a positive terrain during the first three months of 2016. Thefigure below indicates the percentage change in steel production that is 72% of the global steelproduction (www.trade.gov).

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