Sunday

14th Aug 2022

EU denies China market economy status

  • The news will come as a blow to Beijing (Photo: European Commission)

The European Commission today (28 June) announced that it would not grant "market economy status" to China, citing deficiencies in four main areas.

The news is likely to come as a severe blow to the Chinese government whose premier Wen Jiabao made the issue a central plank of his visit to Brussels last month.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

Brussels said that Chinese companies suffer from too much state interference, have weak corporate governance measures, do not ensure equal treatment of all companies in bankruptcy procedures and that its banking sector is not governed by market rules.

Prestige and dollars

Beijing wants the EU to grant it market economy status for two main reasons.

The first is a matter of prestige. By declaring that China does not have a market economy, the EU is effectively stating that China is not on an equal footing with the other major industrialised economies of the West.

In this context, Beijing argues that New Zealand, Singapore and Malaysia have already granted market economy status to China.

The second is about trade. Market economy status plays the decisive role in anti-dumping cases - when there is suspicion that goods are being exported below their fair price.

In these cases, if a country is deemed to have market economy status, the anti-dumping tariffs are calculated using the costs and prices in the country concerned.

But if a country is not deemed to have a market economy, the prices are calculated using a third-country.

Beijing argues that acquiring market economy status will improve the development of China's imports and exports.

No politics involved, says Brussels

However, the European Commission denies that there is a political dimension to the decision.

"This is not a political judgement, it is a technical issue", said Arancha Gonzalez, trade commission spokeswoman.

"This is not an overall judgement on the general economy of China, this is to be put in the context of anti-dumping procedures", she added.

And the Commission argues that only a very small part (0.05 percent) of Chinese exports to the EU are subject to anti-dumping measures and therefore affected by this decision today.

Chinese exports to the EU last year totalled 72 billion dollars, according to Chinese officials.

EU rebuffs China on lifting arms embargo

At a bilateral summit over the weekend, the EU rebuffed calls by China to lift its 17-year arms embargo and declined to grant the country market economy status.

Almost two-thirds of Europe in danger of drought

Data released by the European Drought Observatory show 60 percent of Europe and the United Kingdom is currently in a state of drought, with farming, homes and industry being affected. Drought conditions have also led to an increase in wildfires.

Droughts prompt calls to cut water use amid harvest fears

With the prolonged lack of rain and high temperatures, fears have emerged over water shortages and droughts decreasing crop yields — prompting calls to use less water and reuse urban wastewater for agricultural irrigation.

Brazil pitches itself as answer to Ukraine war food shortages

Brazilian president Jair Bolsonaro is pitching his Latin American country as the answer to the world food crisis following the war in Ukraine. The traditional wheat importer has now exported three million tonnes of the grain so far in 2022.

Opinion

Exploiting the Ukraine crisis for Big Business

From food policy to climate change, corporate lobbyists are exploiting the Ukraine crisis to try to slash legislation that gets in the way of profit. But this is only making things worse.

News in Brief

  1. Germany to help nationals cope with energy price spike
  2. Germany wants pipeline from Portugal
  3. Ukraine urges US to sanction all Russian banks
  4. Spain evacuates 294 Afghans
  5. EU sanctions have 'limited' effect of Russian oil production
  6. Donors pledge €1.5bn to Ukraine's war effort
  7. Sweden overtakes France as EU's top power exporter
  8. Italy's far-right star in European charm offensive

Stakeholders' Highlights

  1. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  2. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  3. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022
  4. Nordic Council of MinistersNordic ministers write to EU about new food labelling
  5. Nordic Council of MinistersEmerging journalists from the Nordics and Canada report the facts of the climate crisis
  6. Council of the EUEU: new rules on corporate sustainability reporting

Latest News

  1. Defying Russian bombs, Ukraine football starts 2022 season
  2. Sweden to extradite man wanted by Turkey
  3. EU must beware Beijing's new charm offensive
  4. Forest fire near Bordeaux forces over 10,000 to flee
  5. Estonia and Latvia sever China club ties
  6. Russian coal embargo kicks in, as EU energy bills surge
  7. Only Western unity can stop Iran hostage-diplomacy
  8. Kosovo PM warns of renewed conflict with Serbia

Join EUobserver

Support quality EU news

Join us