Due to the feeble global economic recovery and dampened global demands, China's steel industry (and those in other countries) faces overcapacity. During the US presidential campaign, rival candidates said that by "dumping its steel products", China has caused the American steel sector to lose its competitive edge. During his campaign trail, Donald Trump even threatened to impose up to 45 percent punitive tariffs on Chinese imports if he was elected president.

Such rhetoric and protectionist measures, however, will not help resolve the global steel overproduction issue.

China has exported only about 10 percent of its total steel output every year over the past decade, which is far below the 40 percent of some developed steel-producing countries. However, the United States and some European Union member countries have blamed China for the global steel overcapacity and launched anti-dumping investigations into Chinese steel products.