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Home BUSINESSEarly recognition of China's market economy status wise option for EU
Thu, 04 Feb, 2016 12:00:40 AM
FTimes- Xinhua Report by Xinhua Writer Li Rong, Feb.4


The European Parliament (EP) debated Monday whether the European Union (EU) should recognize China as a market economy.

     As bilateral trade ties are becoming ever stronger, European lawmakers should let reason prevail, respecting rights and interests of China as a WTO member and making sensible judgements to give an early recognition of China's market economy status (MES) to maximize their win-win results.

     It is known to all that, since its entry into the World Trade Organization (WTO) in 2001, China has been committed to market-oriented economic system reforms.

     So far, over 80 countries, including Russia, New Zealand, Singapore and Australia, have recognized China's status as a market economy.

     However, since EU has not regarded China as a market economy country, China has fallen victim to some unfair and discriminatory EU practice.  

     Under the current EU anti-dumping investigations against China, the assessment is based on a comparison of the export price with that in a "surrogate country" with MES, instead of the domestic price of the product in question.

In one case concerning stainless steel, say, the United States was chosen as a surrogate country and it was obviously unfair given the much higher labor costs.

Such a practice has cost China a lot economically. According to a report of European Commission, 1.38 percent of Chinese imports to the EU are currently affected by anti-dumping investigations, enormous losses for China given their huge bilateral trade volume.

China, as a WTO member, has been seriously fulfilling its legal obligations. So it deserves to enjoy corresponding rights.

Fortunately, such a practice will be terminated by Dec. 11, 2016, according to China's WTO Accession Protocol signed in 2001.

Unfortunately, some politicians in Europe are still sticking to protectionist mentality and positions, using non-market economy status as a weapon against China, and failed to see their side-effect.

China is now the EU's second largest trading partner and one of the biggest markets for the 28-member bloc while the pair's trade links are increasingly growing. Free trade and comparative advantage have been and will be driving forces behind phenomenal growth. Protectionism would only increase their trade frictions and ultimately do harm to both.

In fact, some heavyweight European leaders like German Chancellor Angela Merkel and British Chancellor of the Exchequer George Osborne have voiced their support for an early recognition of China's MES. More and more European leaders and politicians are joining their ranks.

EP lawmaker Christofer Fjellner said in the debate Monday that the issue was not whether China should achieve market economy status but respect for China as a WTO member and respect for international trade rules.

In the debate, Dutch EP lawmakers Marietje Schaake also criticized some EU politicians for taking an emotional stance on the issue "to put forward their own protectionist positions."

Depending on the current circumstances and viewing the increasingly overlapping interests ahead, it is a wise option for EU to recognize China's market economy status as early as possible.


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