A top European official on Sunday said it was urgent to resolve the global issue of overcapacity, and he pressured China to take action to avoid costing European jobs - a connection some analysts said was "exaggerated".

Speaking at a news conference with European Council President Donald Tusk before the opening of the G20 Summit in Hangzhou, Zhejiang province, European Commission President Jean-Claude Juncker said he hoped global leaders at the summit would push for a solution to the overcapacity issue, which he called a global challenge.

He said overcapacity has particularly hurt the steel sector in Europe, where thousands of jobs have been lost in recent years, adding that he is determined to defend the interests of the European steel industry and its workers.

"Addressing the challenge of overcapacity in a credible manner will be the test case," he said, adding that the G20 Summit "must urgently find a solution" to excess steel production. He suggested China accept a monitoring and supervision mechanism for overproduction in the sector after the formation in July of a working group to look at solutions.

Officials and experts called for more communication to resolve trade friction while taking an "objective and rational" view with regard to China's overcapacity problem.

Lu Feng, an economist at Peking University's China Center for Economic Research, said that some accusations aimed at China's steel sector have been somewhat exaggerated.

"It is crucial to realize that China has been actively facilitating communications with other nations to enhance policy coordination," he said.

Despite a number of problems remaining to be solved in China, "the nation has been actively seeking solutions to tackle the problem through reforms and using market-based methods", he said.

At a news conference in August, Zhang Ji, China's assistant minister of commerce, played down accusations that China engaged in so-called dumping of products at low prices to other economies, noting that the nation has imposed export tariffs on some exported steel products.

Zhao Chenxin, spokesman for the National Development and Reform Commission, a leading regulator in charge of excess capacity reduction, said, "China has been taking an active and serious attitude in efforts to cut overcapacity, and is striving to meet capacity reduction targets on time."

China has committed to cutting capacity in the steel sector by 100 to 150 million metric tons over the next five years.

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(China Daily 09/05/2016 page4)