Beijing moved on to threats of a possible refusal of the EU to recognize China’s market economy.
During the meeting, representatives of the European Union and the people’s Republic of China at the summit on July 12-13 in Beijing, the important role played by the recognition of China as a country with market economy. For a long time Beijing is seeking from Brussels for such treatment. In the European Union again there is no common point of view on this issue.
11 December 2001 China joined the world trade organization (WTO). The fact that such a large global economy obeyed the WTO rules, can be called a true success in world trade. But for China itself and its partners, this was originally a double-edged sword. The sharp reduction of import duties put Chinese businesses at risk. Other countries began to fear to be overloaded with goods labelled “Made in China”. Therefore, to avoid possible trade disputes, in the course of negotiations on accession to the WTO was established a special regulation and transition periods.
One of these adjustments (para 15 of the Treaty of accession provides that China within 15 years will not be able to obtain the status of country with market economy. Advantage was the possibility of a trade partner is easier to break the anti-dumping proceedings against Chinese enterprises and set to the highest volume restrictions on Chinese products.
In late December, the transitional period ends. China insists that by the time it was recognized as a country with a market economy. China does not realize the need for additional discussions – this status it must engage automatically. The European Commission also adheres to this opinion. But the European Parliament still cannot decide on this issue. In may, the MPs decided to delay the decision on granting China the status of market economies, and thereby to simplify the trading conditions. The reason was the aggravation of the so-called steel conflict.
European producers accuse China that he sells steel products on the world market at dumping prices, and thus jeopardized a large number of jobs in Europe. Cheap steel products labeled “Made in China” is really putting pressure on iron and steel industry of the EU. Once domestic demand is no longer growing in the same amounts as before, Chinese steel companies are also struggling to survive. They’re trying to sell excess production on the world steel market. The government of Beijing plans to take control of the problem of overproduction, but not interested in that too strictly to infringe on the domestic industry.
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The European Commission is currently faced with a dilemma: whatever decision was made, one of the parties – the European Parliament or China – will be offended. Despite the fact that the vote of the parliamentarians is not mandatory, in a tense atmosphere after the referendum on the British exit from the EU, the European Commission will consider twice before you ignore the decision of the MEPs. Besides, if China would get by assigning the status of country with market economy simplified the terms of trade, the Commission would still require the consent of the European Parliament.
On the other hand, denying China, the EU runs the risk of being punished by China. “Europe needs to think twice before you make a final decision on granting China the status of a country with market economy” – warned after the European Parliament’s resolution on China’s state Agency Xinhua.
As a result of this dispute severely damaged can the German automotive industry. Still, she earned a lot of money in the Chinese market. The Chinese side of caution: it will be in the future. Thus even start talking about a real trade war. But the escalation of trade conflict will hurt China itself, since the EU is the main trading partner of China.
