Posted on 04/29/2002 9:15:49 AM PDT by LarryLied
China's biggest steelmaker has seen its profits plummet as it faces what observers believe will be a flood of foreign steel into its domestic market.
Now that the US has slapped tariffs on steel imports in an attempt to protect its own industry, exporting countries are thought likely to look to China's huge and booming economy as an alternative market.
Baoshan Iron & Steel's admission that net profits for the first three months of the year were 39.5% lower than last year therefore comes at a bad time.
The company, the fourth biggest in the world by market capitalisation, said it made a profit of 547.8m yuan ($66.3m; £45.4m) for the three months, on sales which fell 2.3% to 7.09bn yuan.
Flooding in
The losses at Baosteel, as it is known, follow a 14.4% fall in profits for 2001 as a whole from the previous year.
"In the first quarter of 2002, the domestic and international steel markets were sluggish and the prices of our core products such as cold-rolled and hot-rolled steel plates fell 11% year on year," it said in a statement.
Imports have surged since the US introduced selective tariffs of up to 30%. China's newly-minted membership of the World Trade Organisation and the lower tariffs it brings with it is also encouraging other countries to get in on the act.
Baosteel is now asking for government protection.
Help is on the way, in the shape of anti-dumping investigations launched against cold-rolled steel imports from South Korea, Russia, Taiwan, Ukraine and Kazakhstan.
Oh yes, artificially high prices for everything is really really good. How could we free traders been so stoopid?
LOL! If this is for real, and the real reason behind the steel tarrifs, it just further cements my opinion of the craftiness of this adminstration. The Clinton administration, while brash and loud, always struck me as being rather bumbling and stupid when it came to their policies, hoping the brashness and loudness would cover up for their real lack of direction and substance. The Bush administration, on the other hand, is very quiet but moves powerfully, with long range purpose, and the effects are very real.
A good comparison is to that of chess. The Clinton admin reminds me of a hustling chess player in the park, playing blitz chess for a few dollars - move fast, talk trash, be loud, and hope that your opponent misses your few obvious tricks. The Bush administration is like a grandmaster - slower, quieter, and you don't understand the purpose of all the moves, but in due time the game plan evolves and you can see the purpose of some of the moves you thought were useless before.
Just born that way, I suppose.
Thank you for flagging me. The Stealth President does indeed strike again. Ha!
I guess welfare and minimum wage laws only misdirect poor individuals into sloughtful behavior -- but when applied to protecting corporations -- it somehow strengthens America.
Nice pretzel logic.
I asked him who was dumping the steel and how they were getting away with it. This was part of his reponse.
"The major offenders are countries like Korea, Brazil and Japan(more so before than now), who have very poor currencies and need American dollars much more than a paid work force. These countries in general also get heavy government subsidies, where rather than run insane wellfare programs they pay the steel industries to hire more people (cheap labor when it not only cost you nothing, but puts money in your pocket)."
Especially when if the U.S. supplies a subsidy it is immediately declared illegal by the WTO.
Remember CHESS NOT CHECKERS!
Precisely. IMHO the biggest problem with the idea of free trade is that it assumes that all sides are interested only in peaceful trade.
The weakness of free trade is evident in cases where the manufacturing base for one country (the U.S.) moves to another country (China) that stands a good chance of becoming a military rival.
She labeled him the Stealth President in that he and his administration worked quitely in the background. Then we would read about the accomplishment as he outfoxed the rats and their pressitutes.
She and you are right on track here re the Stealth President and his Stealth Administration.
So please refresh my old memory re your theory/replies which now appear to be coming true!
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