Market-economy status denied due to 'shortcomings' The European Union has joined the US in turning down China's request to be recognised as a market economy. Explaining the decision, a report issued by the EU yesterday said: 'The preliminary assessment, transmitted to the Chinese authorities, acknowledges the economic progress achieved by China over the past years. 'However, remaining shortcomings in four broad areas, which affect the conduct of anti-dumping investigations, mean that it is not possible to grant market-economy status at this stage.' A Ministry of Commerce spokeswoman said: 'We have no comment on this, but our perspective is quite clear: China should get market-economy status.' Both President Hu Jintao and Premier Wen Jiabao have been lobbying EU and US leaders to grant China the status. US Commerce Secretary Donald Evans made Washington's position clear last week in Beijing when he said the Bush administration would not grant the status until all mainland state-owned enterprises (SOEs) were privatised. The preliminary assessment by Brussels said the EU would not grant the status until all SOEs were privatised, corporate governance was improved, laws protecting property rights and allowing bankruptcy were strengthened and transparency was injected into the financial sector. Being recognised as a market economy would make it harder for China's trade partners to file anti-dumping suits in the World Trade Organisation against its exports. The EU has 32 anti-dumping measures in force against China, while the US has 52. Only New Zealand, Singapore and Malaysia have granted China market-economy status since Mr Hu and Mr Wu began their lobbying last year. Hu Biliang , a senior economist with the Chinese Academy of Social Sciences, was disappointed with the EU's tough stance. 'China is a transition economy - if you use strict standards, of course, China has a long way to go,' he said. 'The key is that China will continue to reform despite the fact that the EU and the US won't grant China market-economy status.'
