China understands that the United States is concerned about the closure of US steel companies and the resultant unemployment of blue-collar workers, but the root cause of this wave of global steel overcapacity is shrinking demand due to economic downturn since the global financial crisis, the MOC said in a research report on China-US economic and trade relations.

The report said it is untenable that the United States, while acknowledging the current steel overcapacity is a global issue that requires collective responses, blamed the Chinese government support for the steel sector as an important reason for the excess capacity.

China's steel industry is positioned to meet domestic demand, and the Chinese government does not encourage the export of iron and steel products, but has adopted a series of measures to control exports, according to the report.

It said the proportion of China's steel exports within the United States total steel imports is small, citing a year-on-year decrease of 51.5 percent in the volume of Chinese steel exports to the United States and a 40.1-percent decline in the value in 2016.