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UK to EU: Grant China market economy status
(chinadaily.com.cn)
Updated: 2005-07-05 14:44

The European Union should recognize China as market-economy and Britain is currently talking to other EU members on this issue, said Britain's minister of state for trade, Ian Pearson.

Ian Pearson, responsible for trade policy and foreign affairs

"We in Britain believe China should be granted market-economy status. We are talking to our partners in the EU about this at the moment," said Pearson when visiting China, reported by the Financial Times Tuesday.

"The EU granted market-economy status to Russia two or three years ago, and we think the rise of China should be similarly recognized," he said. Russia was granted the status in 2002, Pearson believed China should be treated equally.

China has longed for the market economy status for years, as its cheap exported goods are the targets of most European and American anti-dumping measures. Such a status would cancel all the punitive anti-dumping measures against China. Currently, the EU has 49 anti-dumping cases with China.

Market-economy status would avoid China from all European anti-dumping restrictions because it would mean Brussels could impose penalties on Chinese goods only if export price was below the production cost but not by comparing the price of Chinese exports with those of third countries, which is what currently has been doing.

The UK is the rotating presidency of the EU this month. The spotlight will fall on its policy on trade with Beijing, which will greatly impact Chinese exports.

Brussels has announced that it would investigate whether China was dumping reinforced shoes in Europe, just weeks after calling a truce in a larger confrontation over Chinese textiles. Moreover, Brussels is considering a similar inquiry into Chinese exports of leather shoes, which will widen the dispute, according to the Financial Times.

The European Commission concluded last summer that Chinas was not ready for the status , citing its so-called reasons as the weak rule of law in China and state interference, as well as poor standards of corporate governance.

Beijing considered the granting of "economy market" status as another political milestone, and under the status, China would be treated equally compared with major Western industrial powers, after joining the World Trade Organization in 2001.

Chinese customs statistics show that two-way trade between China and the EU registered a big rise in the first five months this year, reaching US$81.84 billion, up 24.2 percent, and the EU remains China's largest trade partner.

To date, dozens of countries around the world have recognized China as market economy, including New Zealand and other Asia-Pacific nations.

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