Shedding Light on Energy Subsidies in China

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An Analysis of China’s Steel Industry from 2000-2007

When China identified steel as a strategic industry in the early 2000s, its government ramped up steel production with massive subsidies. Total energy subsidies to Chinese steel from 2000 to mid-2007 reached $27.1 billion, and that conservative estimate may just be the tip of the iceberg.


The Takeaways

  1. China went from a net steel importer to a steel exporter in 2005. It became the largest steel exporter in the world by volume in 2006, up from fifth largest in 2005.

  2. From 2000-2006, China’s energy subsidies to steel grew by 1,365 percent. In 2007, energy subsidies to Chinese steel are estimated at approximately $15.7 billion, a 3,800 percent increase since 2000.

  3. These subsidies have contributed directly to the ballooning of Chinese steel exports and have affected the global and U.S. steel industries.

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