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China urges EU to reconsider market status
(Chinadaily.com.cn/Agencies)
Updated: 2004-06-29 16:31

The Chinese government appealed Tuesday to the European Union to reconsider its rejection of China's request to be recognized as a market economy, saying such status would help both sides.

Foreign Ministry spokeswoman Zhang Qiyue disputed the EU's statement Monday that China had too much state interference in its economy.

A Chinese salesperson checks goods at a newly opened supermarket in Beijing June 29, 2004. China's efforts to cool a booming economy have achieved results and a soft landing is expected in the second half, State Statistical Bureau spokesman Yao Jingyuan was quoted on Tuesday as saying. [Reuters]

``We believe that the European Union should fully recognize the current status of China as a market economy, which is a matter of fact,'' Zhang said. ``It will benefit not only China but the cooperation between the EU and China.''

The private sector makes up ``a considerable part of the national economy'' in China, Zhang said. ``Some statistics show that the prices of 90 percent of goods are set by the market.''

On Monday, EU's executive Commission issued a statement refusing to grant China the Market Economy Status (MES). The statement said China must improve in four key areas,  including the financial sector, the corporate and banking law, state interference and property law."

China had asked the Commission for MES last June and provided follow-up information in September and again this year, and the Commission had agreed to give a preliminary assessment by the end of June.

The Commission said in the statement that four conditions must be met before the bloc will grant MES. They are:

* State influence -- ensuring equal treatment of all companies by reducing state interference, either on an ad hoc basis or as a result of industrial policies, as well as through export and pricing restrictions on raw materials.

* Corporate governance -- increasing compliance with the existing Accounting Law to ensure the usability of accounting information for trade defense investigations.

* Property and bankruptcy law -- ensuring equal treatment of all companies in bankruptcy procedures and in respect of property and intellectual property rights.

* Financial sector -- bringing the banking sector under market rules.
China is seeking to secure the status, which would make it more difficult for its trading partners to impose penalties on dumping of Chinese exports.

Some countries - New Zealand, Singapore, Malaysia and Thailand - have already granted China market economy status.

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