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Emma Ma

As geopolitical tensions intensify, China’s steel sector – the world’s largest – is facing trade-restrictive measures in overseas markets and shrinking margins, but the country must strive to avoid the mistakes of America’s rust belt, according to an article in the Communist Party’s top theoretical journal.
The piece, published in the latest issue of the Qiushi Journal and written jointly by the journal and the China Iron and Steel Association, argued that China should not allow its steel sector to contract in an attempt to redirect more resources towards emerging industries.
“Lessons from America’s rust belt remain a sobering reminder,” the article said. “The de-industrialisation of traditional industries will inevitably trigger a chain of repercussions, including regional economic recession, job losses and sluggish innovation.”
The rust belt refers to a swathe of the United States that experienced severe industrial decline in the late 20th century. Local economies were once heavily anchored in iron and steel production, carmaking, coal mining and raw-material processing.
Industries that underpin national economic security “must never be allowed to undergo market-driven liquidation or passive contraction”, the Qiushi article said.
Profit margins for domestic steelmakers remain depressed
Yu Jiayi, Orient Securities
China has held the world’s top spot in crude-steel output for three decades, the article noted, adding that the country’s production exceeded 960 million tonnes in 2025, accounting for more than half of global output.
The sector has evolved from being “barely capable of manufacturing” into a full-fledged system offering the broadest product range, superior quality and competitive pricing, the article said.
However, it also acknowledged that the sector has faced mounting headwinds, both internal and external, in recent years.
From 2020 to June this year, Chinese steel goods were subject to more than 110 trade-remedy investigations. Trade-restrictive measures have expanded from low-end offerings such as construction steel to high-value-added grades for new-energy vehicles, aerospace use and embodied intelligence, according to the article.
It highlighted Washington’s Section 337 investigation targeting carbon-steel and alloy-steel goods that Chinese firms sell in the US, alleging that the investigation was “dealing a direct blow to China’s exports of high-end steel products”.
Wang Guoqing, a researcher at the Beijing-based Lange Steel Research Centre, said on Wednesday that trade frictions in the steel sector were poised to “become the new normal”.

“Developed economies will deploy an array of instruments to shield their domestic steel industries, one example being the UK’s nationalisation of British Steel, which was previously owned by a Chinese group,” she said in an interview.
“This is the global business environment that Chinese steelmakers will face over the long term.”
Another growing concern is squeezed export profit margins, with domestic oversupply and cutthroat price competition persisting.
In 2025, the average export price for Chinese-made conventional steel products stood at just US$694 per tonne, an 18 per cent drop from 2020. That stems from “slowing infrastructure construction across Southeast Asia and the Middle East”, the Qiushi article said.
Yu Jiayi, an analyst at Shanghai-based Orient Securities, wrote in a Sunday report that some Chinese producers are scheduling planned maintenance shutdowns defensively to limit losses.
“Currently, profit margins for domestic steelmakers remain depressed,” Yu said. “Oversupply is set to persist over the near and medium term.”
Wang noted that de-industrialisation in the US rust belt sparked a host of socioeconomic woes, and that preserving foundational industries did not mean retaining backward capacity.
“The goal is to sustain the industrial foundation, not keep outdated production capacity. China’s push for steel-industry upgrading marks a fundamental difference from the US experience,” Wang added.


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Trade barriers, oversupply and falling export prices are squeezing steel producers as the Qiushi Journal warns against letting the industry contract


Trade barriers, oversupply and falling export prices are squeezing steel producers as the Qiushi Journal warns against letting the industry contract.


China’s steel sector must avoid US rust belt’s fate: party journal

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}Trade barriers, oversupply and falling export prices are squeezing steel producers as the Qiushi Journal warns against letting the industry contract

Trade barriers, oversupply and falling export prices are squeezing steel producers as the Qiushi Journal warns against letting the industry contract