Saturday

9th Dec 2023

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.

Spain's Nadia Calviño backed to be EIB's first female chief

With less than a month to go before the start of a new leadership of the European Investment Bank, the world's largest multilateral lender, the path seems finally clear for one of the candidates, Spanish finance minister Nadia Calviño.

Analysis

Is there hope for the EU and eurozone?

While some strengths may have been overlooked recently, leading to a more pessimistic outlook on the EU and the euro area than the truly deserve, are there reasons for optimism?

EU public procurement reform 'ineffective', find auditors

The EU Commission reformed procurement directives to make bids more attractive (and competitive), but the reform has failed, say auditors. Procedures now take longer, and the number of direct awards and individual tenders has increased over the past decade.

Spain's Nadia Calviño backed to be EIB's first female chief

With less than a month to go before the start of a new leadership of the European Investment Bank, the world's largest multilateral lender, the path seems finally clear for one of the candidates, Spanish finance minister Nadia Calviño.

Analysis

Is there hope for the EU and eurozone?

While some strengths may have been overlooked recently, leading to a more pessimistic outlook on the EU and the euro area than the truly deserve, are there reasons for optimism?

Latest News

  1. How Moldova is trying to control tuberculosis
  2. Many problems to solve in Dubai — honesty about them is good
  3. Sudanese fleeing violence find no haven in Egypt or EU
  4. How should EU reform the humanitarian aid system?
  5. EU suggests visa-bans on Israeli settlers, following US example
  6. EU ministers prepare for all-night fiscal debate
  7. Spain's Nadia Calviño backed to be EIB's first female chief
  8. Is there hope for the EU and eurozone?

Stakeholders' Highlights

  1. Nordic Council of MinistersJoin the Nordic Food Systems Takeover at COP28
  2. Nordic Council of MinistersHow women and men are affected differently by climate policy
  3. Nordic Council of MinistersArtist Jessie Kleemann at Nordic pavilion during UN climate summit COP28
  4. Nordic Council of MinistersCOP28: Gathering Nordic and global experts to put food and health on the agenda
  5. Friedrich Naumann FoundationPoems of Liberty – Call for Submission “Human Rights in Inhume War”: 250€ honorary fee for selected poems
  6. World BankWorld Bank report: How to create a future where the rewards of technology benefit all levels of society?

Join EUobserver

Support quality EU news

Join us