Chinese steelmaking quandary: nothing exceeds like excess

Is it “Look before you leap,” or “He who hesitates is lost”? Is it “Absence makes the heart grow fonder” or “Out of sight, out of mind”? Is it “A penny saved is a penny earned” or “You can’t take it with you?”

This is why wisdom is so hard to come by: there are different versions. Whether or not wisdom can apply to the Chinese steel overcapacity situation is an open question.

The word “intractable” keeps popping up in news stories about China’s 400 million tonnes of excess steelmaking capacity — China says it’s closer to 300 million — and its negative influence on the global steel market.

The recent OECD effort to win agreement by the world’s steelmakers on ways to reduce dangerously bloated global steelmaking capacity failed because of China’s reluctance to get on board.

With more than half the world’s 40% overcapacity in China, its lack of cooperation is problematic to say the least. Global steelmakers sans China released a statement saying as much and reiterating their view that governments must not subsidize or encourage excess steelmaking capacity and must facilitate the shutdowns of uncompetitive mills while providing a safety net for displaced steelworkers.

Seems logical, yet the problem appears intractable — there’s that word again — as China has refused to sign off on these principles. Now the subject is on the radar of this week’s G7 meeting in Japan.

Terms like “sign off,” “get on board” or “get with the program” apparently are Western conceits. And as Rudyard Kipling once quipped: “East is East and West is West and never the twain shall meet.”

We know this is not completely true in the modern world: witness the anime craze in America, borrowed from the Japanese, or the fertile garden of skyscrapers in Shanghai, a la New York in the 1930s. Not to mention French-Asian cuisine.

It’s right about here where we have to “get philosophical.” Eighteenth century British poet William Blake may have been talking about the steel industry when he said, “The road of excess leads to the palace of wisdom ... You never know what is enough until you know what is more than enough,” although most think he was referring to debauchery.

So let’s go straight to the Main Man of philosophy, China’s own Confucius. Around 500 BC he said, “Never impose on others what you would not choose for yourself” — the Golden Rule argument sovereign China could make to the rest of the steel world.

But Confucius also said this: “To go beyond is as wrong as to fall short.”

Getting philosophical is also known as rationalizing, which is what China should be doing with its steel industry.