NZ to investigate Chinese steel

China is calling it discrimination and said it would hamper trade with New Zealand.

The Ministry of Business, Innovation and Employment said evidence provided by industry sources in New Zealand justified an investigation into whether China was subsidising galvanised steel coil.

The practice of 'dumping', or selling surplus goods below cost, is illegal under most trade agreements.

Local companies have claimed steel dumping was happening in New Zealand, and could have a drastic impact on the domestic industry.

China's Ministry of Commerce said exports of galvanized steel here were small, at about 4000 tonnes, compared with other countries whose exports of the product to New Zealand had doubled in the past two years.

Chinese media quoted Wang Hejun, the head of the trade remedy investigation department with the ministry, as saying protectionism was not the answer for New Zealand's steel industry and would only deal a further blow to international trade.

Earlier in the year New Zealand's Ministry of Foreign Affairs and Trade investigated claims that industry players in China had warned the kiwifruit exporter Zespri of possible trade retaliation over claims of steel dumping.