Part 6/8:
One of the most puzzling aspects of the ongoing crisis is the continuously low steel prices in China, which significantly undercuts global competitors. A substantial part of this price advantage stems from low labor costs and minimal environmental investment in production, enabling Chinese steel to outprice rivals. However, these low prices come at a social and environmental cost, leading to substantial pollution and health issues for local communities.
Furthermore, the substantial hidden subsidies received by Chinese steel companies, estimated at over 320 billion yen, highlight the grim dependency on government support to sustain operations. Should these subsidies be withdrawn, experts warn that the majority of Chinese steel enterprises could face instant bankruptcy.