EU still has troubles with China market economy status

EU still has troubles with China market economy statusChina has long wanted the EU to recognize it as a market economy so that it can increase exports to the trade bloc, which is already China's largest customer. But European Commission President Jean-Claude Juncker said that won't happen until China stops subsidizing steel exports.

A senior European Commission official said on Thursday that the European Union is moving ahead with the process of giving China market economy status to boost trade, but is concerned about overcapacity.

"We are in favor of free long as overcapacity is harming fair trade it's very difficult to do free trade," Jyrki Katainen, EU Commission vice-president for jobs, growth, investment and competitiveness, said at an event in Hong Kong. "We are willing to fulfil our legal commitment but we are not naive."

The United States and European Union are stepping up pressure on China's Communist Party to conform to global trade rules, just as the government rejects international norms in the South China Sea.

U.S. officials filed a complaint with the World Trade Organization Wednesday for failing to lift export duties on nine raw materials, a policy designed to give Chinese manufacturers a cost advantage in products made from them.

The European Union, meanwhile, is insisting that China stop dumping cheap steel on the global market to boost its industry at the expense of foreign companies. The U.S. has already hit Chinese steel with 500 percent tariffs for violating global trade rules.

Whether the EU should recognize China as a market economy is a politically-charged debate within the 28-member bloc. The issue has become a flashpoint in Europe as a sluggish EU economy, excess Chinese production capacity and a struggling European steel industry spark fears of a manufacturing decline and further job losses from the UK to Italy.
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