Philip Hammond urges China to cut steel production to save UK jobs

Britain has urged China to dramatically reduce its steel manufacturing capacity that has been blamed for flooding international markets for the metal and precipitating the collapse of Tata Steel in the UK.

The plea was made by the Foreign Secretary Philip Hammond during an official visit to Beijing for a meeting with his Chinese counterpart Wang Yi.

China said it had plans to shut steel mills over the next five years that would cut its capacity to an estimated 1.13bn tonnes by 2020. But this figure still far exceeds China's current domestic demand for steel and is unlikely to have a significant effect on international wholesale prices.

Cheap Chinese steel is one reason why UK-based producers, such as Tata, have found it hard to remain profitable. Higher energy costs in Britain compared with countries like China where energy costs are subsidised is also been a contributory factor.

The Foreign Secretary said his discussion with Mr Yi had provided the opportunity to talk about "issues of mutual concern".

"I urged China to accelerate its efforts to reduce levels of steel production," Mr Hammond said afterwards.

"The UK's focus is on finding a long-term sustainable future for steel making at Port Talbot and across the UK, and I welcomed the potential interest of Chinese companies in investment in UK steel-making."

Mr Hammond added that he had also raised the UK's continued concerns over the case of five Hong Kong booksellers who disappeared and, it later emerged, had been detained by Chinese authorities.

In coded diplomatic language he said: "The UK's relationship with China is a strategic partnership and we've acknowledged on both sides that such a relationship enables us to raise difficult issues and to discuss them together. In that spirit we discussed the UK's continued concerns over the booksellers' case and Mr Lee Po."