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EU industry lobby wants trade safeguards against China to stay in place
A EUROPEAN alliance 25 European industry associations, says China should be denied "market economy" status because it is still a state-led subsidised economy.
When China joined the World Trade Organisation (WTO) in 2001, it was recognised that its local prices were not set by market forces, which called for a change in anti-dumping rules.
Normally, anti-dumping tariffs can be applied on others if a country's export prices are below its domestic prices, Reuters reports.
But because China's domestic prices were state-controlled, WTO anti-dumping tariffs could now be set to make Chinese exports as expensive as those of richer countries.
Those WTO limitations on China appear to expire on December 11, 2016, over the objections of Aegis (shield) Europe, a group that wants the status quo to continue.
"The classification of China as a non-market economy constitutes a necessary 'air-lock' mechanism shielding the European market system from alien, distorting influences," the report said.
China has already warned the EU to abide by WTO rules and not to resort to what it considers protectionism.
Aegis Europe's 372-page report, conducted by Munich-based consultancy Think!Desk, says the Chinese Communist Party still plays a central role in the economy, with 71 five-year government plans and 22 national industrial-sector plans.
Europe must make a decision soon on designating China a market economy, because granting that status will require legislative changes that must be approved by the European Parliament and translated into the bloc's 23 official languages.
When China joined the World Trade Organisation (WTO) in 2001, it was recognised that its local prices were not set by market forces, which called for a change in anti-dumping rules.
Normally, anti-dumping tariffs can be applied on others if a country's export prices are below its domestic prices, Reuters reports.
But because China's domestic prices were state-controlled, WTO anti-dumping tariffs could now be set to make Chinese exports as expensive as those of richer countries.
Those WTO limitations on China appear to expire on December 11, 2016, over the objections of Aegis (shield) Europe, a group that wants the status quo to continue.
"The classification of China as a non-market economy constitutes a necessary 'air-lock' mechanism shielding the European market system from alien, distorting influences," the report said.
China has already warned the EU to abide by WTO rules and not to resort to what it considers protectionism.
Aegis Europe's 372-page report, conducted by Munich-based consultancy Think!Desk, says the Chinese Communist Party still plays a central role in the economy, with 71 five-year government plans and 22 national industrial-sector plans.
Europe must make a decision soon on designating China a market economy, because granting that status will require legislative changes that must be approved by the European Parliament and translated into the bloc's 23 official languages.
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