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China, US jittery ahead of EU decision on market economy status for China
December 31, 2015, 6:19 am

European Commission President Jean-Claude Juncker greets Chinese Premier Li Keqiang at an EU-China business summit in Brussels, June 29, 2015 [Xinhua]

European Commission President Jean-Claude Juncker greets Chinese Premier Li Keqiang at an EU-China business summit in Brussels, June 29, 2015 [Xinhua]

China has refuted recent US comments warning Europe against granting China market economy status on Wednesday, saying this would go against China’s World Trade Organization (WTO) accession accord.

“We hope this is a rumour,” Chinese Foreign Ministry spokesperson Lu Kang said in Beijing.

Financial Times report this week said Washington has warned Brussels against granting China market economy status as it could hamper efforts to prevent Chinese companies flooding US and European markets with unfairly cheap goods.

To safeguard the “solemnity of the global trade system” is the common responsibility of all WTO member states and also meets their respective interests, the Chinese spokesperson said at a press briefing on Wednesday.

Market-economy status for China would ensure the EU uses Chinese data for trade probes affecting the second largest economy in the world. At present, the EU uses other nations’ figures to calculate levies against China meant to counter below-cost, or “dumped,” imports.

China faces more EU anti-dumping duties than any other country. The two sides went through major disputes on trade measures on solar panels imported from China before reaching deals on a minimum import price and quota set for Chinese imports in 2013.

China has also cited China’s WTO Accession Protocol signed in 2001 as stating this practice should be terminated by 11 December 2016. Under the accord, WTO members pledged to scrap in December 2016 a shortcut for applying a non-market economy standard in calculating anti-dumping duties on China.

“It is a fundamental principle of the international law to abide by treaties. No contracting party can evade its legal obligation to international treaties by citing domestic law and take unfair, unjust and unreasonable discriminatory practices towards Chinese companies,” said Lu.

China is upholding legal WTO obligations, and should at the same time enjoy the rights granted by the WTO to its members, Lu said.

The Chinese Foreign Ministry also urged the EU to take substantial steps to fulfil its obligation to China’s WTO Accession Protocol, a move that would signal more European Union trust in China.

“This will help growth of China-EU trade relations,” Lu said.

The European Commission, the 28-nation EU’s executive arm, is weighing legal and political considerations and is expected to make a decision early next year.

Last year, Chinese investment in the EU almost tripled and bilateral trade exceeded $615 billion.

In addition to trade efforts, China is seeking to boost its global influence by signing up countries to its Asian Infrastructure Investment Bank (AIIB).

Half of the European Union including Germany, Britain, France, Italy are founding members of the AIIB. The AIIB will extend China’s financial reach and compete not only with the World Bank, but also with the Asian Development Bank, which is heavily dominated by Japan.

 

TBP and Agencies

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