China aluminum officials at U.S. trade hearing urge dialogue in face of criticism

By Eric Walsh

WASHINGTON, Sept 29 (Reuters) - A Chinese industry group making a rare appearance at a U.S. government hearing sought on Thursday to counter arguments that excess aluminum capacity in China threatened American and global producers and processors of the metal.

Appearing at the end of a day of submissions at the U.S. International Trade Commission, the officials argued that China's aluminum industry had been a major contributor to the global economy.

"We believe we can effectively address the global aluminum industry's challenges through dialogue and cooperation," officials from the China Nonferrous Metals Industry Association said in a submission.

The hearing, part of an investigation requested by the House of Representatives Ways and Means Committee, heard from U.S., Canadian, European and Russian groups and companies involved in smelting, extruding and recycling. They argued that China's excess capacity was led by government policy and had caused lower prices worldwide.

The Chinese trade group officials said their industry's development had been driven by domestic demand that was expected to grow as the metal was used in new applications such as railroad cars and overpasses. They added that Beijing had eliminated some inefficient capacity and was reducing investment in the sector.

The arguments appeared in the face of a push by some U.S. industry members for Washington to impose countervailing or anti-dumping duties on some Chinese producers.

The U.S. Department of Commerce is investigating China Zhongwang after the U.S. Aluminum Extruders Council alleged the company evaded U.S. import tariffs on aluminum extrusions.

Extrusion is the process of shaping aluminum by forcing it to flow through an opening in a mould to make products for use in industries ranging from electronics to aerospace.

U.S. industry and labor groups at the hearing also complained about the heavy use of coal to generate electricity to power most of China's smelters, a practice that appeared to be at odds with Beijing's promises to reduce greenhouse gas emissions.

They also accused China of using third-country markets, including Mexico and Vietnam, and mislabeling primary aluminum as semi-fabricated metal, in an effort to evade high tariffs.

The ITC, which has no power to enact trade sanctions, will eventually issue a report to the House panel.

(Editing by Peter Cooney)