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No need to nitpick over China's market economy status

(People's Daily)

15:33, September 28, 2011

Edited and Translated by People's Daily Online

According to statistics from the Chinese Ministry of Commerce, 81 countries, including Russia, Brazil, New Zealand, Switzerland and Australia have recognized China's market economy status, while other countries, including the United States, European Union member states and Japan still refuse to recognize China as a market economy.

In fact, China will automatically obtain full market economy status anyway 15 years after joining the World Trade Organization, according to the rules of the WTO. However, an early recognition of China's market economy status would be a sign of friendship and goodwill, said Gu Qingyang, director of public management and training at Lee Kuan Yew School of Public Policy under the National University of Singapore. It is a pragmatic choice and in the interests of ASEAN countries to recognize China's market economy status before the deadline.

Zhuang Juzhong, deputy chief economist at the Asian Development Bank, also said that ASEAN countries hope more countries can recognize China as a market economy because overall it will be a win-win situation.

EU uses non-recognition as excuse to restrict Chinese products

Experts have said that the European Union and its member states refuse to grant China market economy status not because they fail to see China's economic achievements and development trends but because they want to use non-recognition as an excuse to impose strict restrictions on Chinese products.

In recent years, officials from E.U. member states, including some from heavyweights Germany and France, have repeatedly called on the European Union to recognize China's market economy status as early as possible.

The United States is another major developed country that is still unwilling to recognize China's full market economy status. As early as 2004, China and the Untied States had started the negotiation on recognizing China's market economy status. Although the Untied States has promised many times to recognize China's market economy status in the past seven years, it still has not taken practical actions to fulfill the promise.

The issue of recognizing China's market economy status or not has turned into an important trump card for the United States in the trade negotiations between the Untied States and China. Analysts said that recognizing China's market economy status is closely connected with the trade between China and the United States. U.S. enterprises worry about their benefits being damaged by it, and many U.S. congressmen keep pressing the U.S. government, which is why the promise has still not been fulfilled.

The U.S. government also regards the issue as a bargaining chip and uses it to press China and force China to compromise on issues such as the RMB exchange rate and U.S. Treasury securities.

Since China's market economy status is not recognized, Chinese enterprises are frequently frustrated by anti-dumping activities. While evaluating whether China is dumping products, some countries will be able to adopt the data from a third country, overrate the extent of alleged Chinese dumping practices and find excuses for their anti-dumping activities.

Song Hong, a researcher from the Institute of World Economics and Politics under the Chinese Academy of Social Sciences, said that recognizing China's market economy status means weakening and reducing the legal basis and political measures used to carry out trade restriction against the products from China and therefore will reduce the number of anti-dumping and anti-subsidy activities against the products from China and alleviate destructive power of the activities.

China has made remarkable achievements in marketization reform

Gu told reporters that a country's market economy status should not be judged completely by history and reality, but should be viewed on the basis of market development trends in the future. Since its admission to the WTO, China has seen fundamental changes in its economy and has shown features of a free market economy in terms of its economic marketization and ties with the international economy. For example, China's commodity prices are very flexible in the international market and foreign trade. China is playing an increasingly important role in overseas trade.

Hu Jiangyun, researcher at the Development Research Center of the State Council, said that some Western countries are both the developers and the biggest destroyers of market economy rules. For example, the Unites States intended to break WTO rules by implementing steel protective measures in 2003, and its true purpose was to promote trade protectionism. Gu also said that China has achieved great progress in marketization reform and that Europe, the Unites States, Japan and other countries should notice China's achievements and should not criticize unreasonably and judge too harshly.


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Carlos Romanov at 2011-09-3058.32.211.*
China has made significant improvement in many area of its economy and marketplace.

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