EU to deny ‘market economy status’ to China

The EC Com­mis­sion has decid­ed, accord­ing to the Finan­cial Times, that Chi­na may meet the least sig­nif­i­cant of its five tests of a ‘mar­ket econ­o­my’: the absence of state inter­fer­ence with entre­pris­es linked to pri­va­ti­za­tion and the absence of barter trade poli­cies. But … bq. The ver­dict is much­tougher on the four key hur­dles: the degree of gov­ern­ment influ­ence on the econ­o­my, for exam­ple through tax dis­crim­i­na­tion; the exis­tence and imple­men­ta­tion of trans­par­ent and non-dis­crim­i­na­to­ry com­pa­ny law that ensures ade­quate cor­po­rate gov­er­nance; the exis­tence and imple­men­ta­tion of a coher­ent, effec­tive and trans­par­ent set of laws to ensure prop­er­ty rights and the oper­a­tion of a bank­rupt­cy regime; and the exis­tence of a gen­uine finan­cial sec­tor which oper­ates inde­pen­dent­ly from the state. (“Finan­cial Times”: “New Zealand(see my ear­li­er report)”:—-nz-pays-its-dues, Sin­ga­pore, and Malaysia have giv­en Chi­na the request­ed recog­ni­tion. Aus­tralia is being asked to do so as a con­di­tion of begin­ning a free trade agree­ment nego­ti­a­tion with Chi­na. The impact of the adverse deci­sion, in the EU as in Aus­tralia, is chiefly in the way in which Chi­na’s trade is treat­ed in anti-dump­ing inves­ti­ga­tions. Inves­ti­ga­tions of imports from a ‘non-mar­ket econ­o­my’ are prej­u­di­cial. There’s more on the ‘leaked’ EC report “here”: Update: In fact, Thai­land has also now offered ‘mar­ket econ­o­my sta­tus’ to Chi­na. See “this(link to Chi­na New Daily)”:–06/22/content_341279.htm report.

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