Britain sacrifices Entire EU steel industry to curry favour with China

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"The British are sacrificing an entire European industry to say thank you to China for signing up to the nuclear power project at Hinkley Point, and pretending it is about free trade," said one official in Brussels bitterly.

What they are blocking is a change to an EU regulation intended to beef up Europe's 'trade defence instruments' (TDI), enabling it to respond much more quickly to Chinese dumping and too impose much tougher penalties.

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While Washington has slapped penalties of 267pc on Chinese cold-rolled steel, the EU peashooter has so far managed just 13pc.

Redcar has already paid the price for this ultra-free trade ideology, and Port Talbot is about to follow. There will eventually be little left if the current drift in trade policy is allowed to continue.

China's share of global steel output has risen from 10pc to 50pc over the last decade. It has installed capacity of 1.2bn tonnes a year that it can never hope to absorb as the construction boom deflates.

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Premier Li Keqiang may genuinely want to purge the Chinese economy of its excesses before the country crashes into the middle income trap, but his views are routinely ignored by the Politburo whenever they clash with party imperatives.

The fact remains that China is still adding extra capacity, albeit of a greener kind than the dirty micro-mills of the smog bowl.

The giant state producer Sinosteel - with $16bn of debts - was rescued from bankruptcy in October. The reforms failed their first big test. UBS estimates that the 100 biggest steel producers in China lost $11bn in the first ten months of last year. The state plugged the hole.