Hammond confronts China over steel dumping in London talks

Mr Hammond acknowledged work that China has done to reduce its overall output but insisted European Union countries still need to find a way to protect themselves against “market distorting trade patterns”.

Steel dumping has been partially blamed for the crisis engulfing Britain’s industry which led to Indian firm Tata Steel set out plans to back out of its UK operations including sites in South Yorkshire.

Mr Hammond raised the issue during talks with Chinese vice premier Ma Kai in London.

After announcing a raft of measures on infrastructure investment and closer financial cooperation between the UK and China, Mr Hammond told a press conference at Lancaster House, central London: “We have discussed the challenges of the steel industry, but I have discussed them many times with Chinese interlocutors, not only in this role but in my previous role as Foreign Secretary.

“There is of course a huge global surplus of steel capacity.

“China has in fact made significant reductions in its overall steel output but there is still a problem.

“It’s important that we have effective and sustainable trade protection mechanisms that do deliver the protection we need against unfair trade and the low-cost dumping.

“We’ve seen measures that the EU has applied to Chinese steel being highly effective, reducing levels of imports very dramatically.”

He said it was important the EU complies with international obligations and develops “a sustainable model of dealing with market distorting trade patterns”.

Mr Hammond repeatedly hailed a “golden era” in UK-Sino relations as he set out agreements reached during the eighth UK-China Economic and Financial Dialogue (EFD).

Among the measures announced on Thursday are a move to the next stage of research in plans to link the London and Shanghai stock exchanges.

China has also agreed to gradually raise the 50 per cent limit on foreign ownership for securities and mutual fund companies to give British firms greater freedom to operate in China.

A UK-China FinTech bridge to strengthen regulatory cooperation will be established, and a number of measures on green finance were also announced.

In addition, a number of Chinese financial companies will open offices in London, including insurance company China Life, the China Foreign Exchange Trade System and Shanghai Clearing House.

Mr Hammond said: “Our strategic collaboration and the announcements I’ve just described are evidence of the continued strengths of this relationship.

“This eight Economic and Financial Dialogue sets the foundation for a new chapter in our partnership.

“I look forward to working with vice premier Ma to give effect to our commitments and thus contribute to delivering a golden era in UK-China relations.”

Mr Ma said: “This year marks the beginning of the golden era of China-UK relations and next year will mark the 45th anniversary of the ambassadorial diplomatic relations between our two countries.

“Our economic cooperation is now standing at a new historical starting point, it is full of opportunities and so much can be done.

“We will continue to use the EFD to continuously deepen our comprehensive cooperation in economy and trade, jointly advance our global comprehensive strategic partnership and bring more and greater benefits to our people.”