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China’s government hit out at EU steel anti-dumping penalties on Tuesday, saying it would defend Chinese business and denied it was exporting its own overcapacity problems as critics have suggested.

Gao Hucheng, minister of commerce, told a press conference in Beijing that overcapacity in the metals industry was not just a Chinese problem. “Steel oversupply is a global problem and a global problem requires collaborative efforts by all countries,” he said.

China safeguards the right to defend Chinese businesses in accordance with the rules of the World Trade Organisation,” he added, in an apparent threat to impose tit-for-tat penalties.

“Consumers and some other businesses benefit from the lower prices, so let us make the point that this is purely market behaviour, not the behaviour of the Chinese government or the EU governments.”

Brussels has imposed tariffs on a type of steel from China to try to defend Europe’s manufacturers from a flood of cheap imports.

The EU said last month it would slap provisional duties on “high-fatigue performance reinforcement bars”, known as rebar, used in the UK and Ireland to strengthen concrete.

Steel producers worldwide accuse China of triggering a global collapse in prices by dumping its excess output — meaning selling below home market prices or the cost of production.

However, Mr Gao rejected the charge China was to blame, saying the price falls have occurred in many commodity industries, not just steel.

“It boils down to changes in global supply and demand,” he said. “Overcapacity is a pronounced problem facing all countries . . . there is still the problem of oversupply with steel and energy products and other commodities. ”

China’s steel exports rose 20 per cent to hit a record 112.4m tonnes last year.

Job losses in European steel plants have put pressure on Brussels to halt the flow of cheap Chinese steel to Europe. Last month Tata Steel announced than 1,000 job cuts, adding to the thousands already lost over the year, along with several plant closures.

This week the EU Chamber of Commerce in Beijing said in a study of Chinese industries that overcapacity in China is a growing problem.

Six out of eight industries studied by the chamber, ranging from glass to paper to steel, show signs that factories are operating at even lower rates than they were in 2009 in the immediate aftermath of the global financial crisis. In all of the industries studied, Chinese companies compete with large European businesses.

Additional reporting by Ma Fangjing

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