Introduction - focused on China

Commonly affected by the potential granting of Market Economy Status (MES) to China

According to previous negotiations China is looking forward to being granted MES by the EU by the end of 2016 depending on the fulfilment of certain criteria.

The five criteria:

• Allocation of economic resources by the market: NO
• Removal of Barter trade: YES
• Corporate Governance: NO
• Property Rights (real property, IP, bankruptcy, competition): NO
• Open Financial Sector: NO

China is not a Market Economy

as China has not fulfilled the promises it made in 2001

• China acceded to the WTO on 11 December 2001.
• A Protocol of Accession (dated 11 November 2001) set out the terms.
• The Protocol set out all China’s committments.
• Some commitments were to phase out non-market features of the economy.
• Other commitments (like tariffs etc) were immediate.

China has not complied with its WTO Accession Protocol

as Prices in China are not set by the market

Price Controls

China shall, subject to paragraph below, allow prices for traded goods and services in every sector to be determined by market forces, and multi-tier pricing practices for such goods and services shall be eliminated.

Limited exceptions:

tobacco; edible salt; natural gas; certain pharmaceuticals; grain; vegetable oil; fertilizer; silkworm cocoons; cotton; health and related services; professional services; transport charges; bank charges; selling and renting residential apartments.