socialist market economy system is the political objective set by China itself and it
is not subject to recognition by other countries. Unfortunately, China has dedicated
enormous diplomatic resources for quite a while in the attempt to seek early
recognition of its“full market economy status”by the EU, leading to setbacks in
China-EU relations.
The non-market economy status issue had a tremendous impact on some Chinese
enterprises and export products. The value involved in anti-dumping cases was not
high and a single case with 100 million USD was considered a very big one before
- The value of commodities involved in anti-dumping cases each year was less
than 1 % of China’s exports to the EU, this value was even less than 0.01 % in
some years. Previously, about one billion USD was involved each year, but now
amounts are increasing, and traditional products are elevated to hi-tech products; a
single case among the anti-dumping cases involving the data card launched in 2010
hit more than 4 billion USD. The amount involved in anti-dumping investigations
against photovoltaic products launched in 2012 reached more than 20 billion USD,
accounting for 7 % of the products exported from China to the EU. It was abso-
lutely crucial to verify whether enterprises enjoy“market economy status”and then
to determine the dumping price during anti-dumping investigations.
As December 23, 2016 draws near, according to the Protocol on China’s
Accession to the WTO, the EU will have to stop using prices or costs from ana-
logue countries to define the dumping margins of Chinese products after December
23, 2016, whether or not the EU has recognized China’s market economy status.
Therefore, the importance of the issue concerning China’s market economy status
in China-EU relations is gradually decreasing. The EU also knows this very well.
After market economy status negotiations between China and the EU entered the
period of a trough in 2007, so as not to lose this bargaining chip, the EU took
the initiative of presenting a new negotiation scheme by partially recognizing the
market economy status of some Chinese industries and enterprises to induce China
to continue negotiations. Negotiations between China and the EU were also
changed to negotiations concerning the“full market economy status”issue.
Recognition of China’s market economy status only increases marginal costs for
anti-dumping measures taken by the EU and brings more trouble to the EU in
presentation of evidences and procedures, but it cannot prevent the EU from
adopting anti-dumping means. Moreover, anti-dumping is only one means in the
EU’s trade protectionism; besides this means, the EU can also adopt such means as
anti-subsidy measures. Therefore, even if the EU recognizes China’s full market
economy status in advance, such recognition will not fundamentally address trade
protectionism in the EU. Whether market economy status is granted or not is not
significantly related to the number of anti-dumping cases.
This shows that market economy status is certainly important, but it is not a
panacea for dealing with China-EU economic and trade issues. As the market
economy status issue does not have a vital bearing on the overall situation and its
returns are diminishing, it is not necessary for China to make this issue contribute to
stranding China-EU relations and to exchanging something for addressing this
3 China-EU Economic and Trade Relations 87