China tells banks to lend to expand steel exports

In this Aug. 22, 2014 photo, a man stands on bundles of steel pipes in a steel products dockyard along the Yangtze River in southwestern China's Chongqing Municipality. Regulators told Chinese banks on Thursday, April 21, 2016, to finance steel exports to help reduce a supply glut in a move that could worsen trade tensions with Europe and the United States. (Chinatopix via AP) CHINA OUT (The Associated Press)

BEIJING – China's government has told state-owned banks to support exports by steel producers in a move that could worsen mounting trade strains with Europe and the United States.

The export credit is part of an order Thursday to banks to finance an overhaul of state-owned coal and steel industries to reduce supply that far exceeds demand. That has pushed down prices, leading to heavy financial losses.

The order by the Chinese central bank and financial regulators said bank support could include financing for exports and to shift operations abroad.

Complaints that China is exporting steel at excessively low prices have prompted protests by European steel workers. India's Tata Steel cited low-cost Chinese competition when it announced plans this month to sell money-losing British operations.