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Europe sides with the US: Sorry, China, You're still not a Market Economy

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The European Parliament on Thursday may have dashed China’s hopes of winning “market economy” status, a potentially crushing blow to Beijing hopes after a 15-year wait.

The Parliament said China does not yet meet the criteria to be deemed a market economy like the United States and Europe, where prices are determined by supply and demand rather than government diktats. The Parliament also rejected relaxing anti-dumping measures used to push back against unfair Chinese trade. It also noted that China is in violation of 56 of the European Union’s current 73 anti-dumping measures.

The United States has long called on Europe to refuse China market status. The resolution passed Thursday is nonbinding, but puts pressure on the European Commission, which will consider granting China the status later this year. The European Parliament then will vote on whether to approve that proposal.

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China covets the prized classification. Beijing believes it is a necessary condition following its accession to the World Trade Organization 15 years ago. It would make it harder to file grievances against China for flooding the market with its goods. However, Chad Bown, senior fellow at the Peterson Institute for International Economics, said he does not think Beijing will get this status automatically.

“There is no precedent for this, so it’s likely it is going to be litigated,” Bown told Foreign Policy. “It will take a couple of years before we know” if WTO accession is enough to grant China market status.

The main issue for the EU is steel, particularly China’s severe production overcapacity, which is flooding global markets, depressing prices, and putting steelworkers on the dole. In the resolution, lawmakers note that China’s overproduction has “strong social, economic, and environmental consequences in the EU.” It was backed by 546 lawmakers, with only 28 voting against. Seventy-seven abstained.

China is the European Union’s second-biggest trading partner. Daily trade flows between the two total more than $1.1 billion.

But when it comes to steel, the two are at odds. The European steel industry, particularly in Britain, has been struggling as China floods the global market with cheap product. In the last two years alone, Beijing has produced more steel than Britain has since mass production began there during the Industrial Revolution.

Beijing has pushed back hard against this argument. In an op-ed published in the Daily Telegraph last month, the Chinese ambassador to the United Kingdom, Liu Xiaoming, wrote: “It is regrettable that some people in Britain blamed China for what is happening in the British steel industry. Making China the ‘scapegoat’ only misleads the public and contributes nothing to the solution of the problem.”

The amount of steel China produces is staggering. According to the World Steel Association, Beijing is responsible for nearly 50 percent of the global steel supply. The chart below, based on association data, shows just how much more than its rivals China has produced in the first three months of this year.

This year alone China has produced nearly 10 times as much as the United States, its closest rival. And this has driven the price of steel into the ground. At the start of 2012, a tonne of steel cost $544. As of yesterday, the same unit went for $50.

According to Bown, this won’t change until China decelerates its steel production. As its economy surged over the last decade, Beijing pumped it out in order to build factories, homes, cars, and other products.

“The problem is their economy has started to slow down. They now don’t need nearly as much steel as they once did,” Bown said. But closing plants to curtail production carries a political and social cost — laid-off workers — that leadership in Beijing can hardly afford as it tries to deal with overcapacity in other industries, like coal.

Bown added: “Are they going to wind [production] down? Are they going to bring inefficient plants off-line? We don’t know the answer.”

http://foreignpolicy.com/2016/05/12...sorry-china-youre-still-not-a-market-economy/
 
The European Parliament on Thursday may have dashed China’s hopes of winning “market economy” status, a potentially crushing blow to Beijing hopes after a 15-year wait.

The Parliament said China does not yet meet the criteria to be deemed a market economy like the United States and Europe, where prices are determined by supply and demand rather than government diktats. The Parliament also rejected relaxing anti-dumping measures used to push back against unfair Chinese trade. It also noted that China is in violation of 56 of the European Union’s current 73 anti-dumping measures.

The United States has long called on Europe to refuse China market status. The resolution passed Thursday is nonbinding, but puts pressure on the European Commission, which will consider granting China the status later this year. The European Parliament then will vote on whether to approve that proposal.

1.gif

China covets the prized classification. Beijing believes it is a necessary condition following its accession to the World Trade Organization 15 years ago. It would make it harder to file grievances against China for flooding the market with its goods. However, Chad Bown, senior fellow at the Peterson Institute for International Economics, said he does not think Beijing will get this status automatically.

“There is no precedent for this, so it’s likely it is going to be litigated,” Bown told Foreign Policy. “It will take a couple of years before we know” if WTO accession is enough to grant China market status.

The main issue for the EU is steel, particularly China’s severe production overcapacity, which is flooding global markets, depressing prices, and putting steelworkers on the dole. In the resolution, lawmakers note that China’s overproduction has “strong social, economic, and environmental consequences in the EU.” It was backed by 546 lawmakers, with only 28 voting against. Seventy-seven abstained.

China is the European Union’s second-biggest trading partner. Daily trade flows between the two total more than $1.1 billion.

But when it comes to steel, the two are at odds. The European steel industry, particularly in Britain, has been struggling as China floods the global market with cheap product. In the last two years alone, Beijing has produced more steel than Britain has since mass production began there during the Industrial Revolution.

Beijing has pushed back hard against this argument. In an op-ed published in the Daily Telegraph last month, the Chinese ambassador to the United Kingdom, Liu Xiaoming, wrote: “It is regrettable that some people in Britain blamed China for what is happening in the British steel industry. Making China the ‘scapegoat’ only misleads the public and contributes nothing to the solution of the problem.”

The amount of steel China produces is staggering. According to the World Steel Association, Beijing is responsible for nearly 50 percent of the global steel supply. The chart below, based on association data, shows just how much more than its rivals China has produced in the first three months of this year.

This year alone China has produced nearly 10 times as much as the United States, its closest rival. And this has driven the price of steel into the ground. At the start of 2012, a tonne of steel cost $544. As of yesterday, the same unit went for $50.

According to Bown, this won’t change until China decelerates its steel production. As its economy surged over the last decade, Beijing pumped it out in order to build factories, homes, cars, and other products.

“The problem is their economy has started to slow down. They now don’t need nearly as much steel as they once did,” Bown said. But closing plants to curtail production carries a political and social cost — laid-off workers — that leadership in Beijing can hardly afford as it tries to deal with overcapacity in other industries, like coal.

Bown added: “Are they going to wind [production] down? Are they going to bring inefficient plants off-line? We don’t know the answer.”

http://foreignpolicy.com/2016/05/12...sorry-china-youre-still-not-a-market-economy/

This means China goods may face unexpected restriction of tariff Entering EU market.
to admit, Vietnam is the same but they are true, we are not pure market economy.
 
Read in recent WSJ article that China is propping up loss-making companies with loans, cheaper electricity, etc, just to keep them going. It's causing a glut of goods and causing a depression in prices worldwide. I'm expecting a looming trade war with US (Trump or not) and Europe.
 
Which c
This means China goods may face unexpected restriction of tariff Entering EU market.
to admit, Vietnam is the same but they are true, we are not pure market economy.
Which coutries are pure market economies, i.e no interference of goverment into economic activities. There is no coutry like that.

Increasingly, western government have to use their financial strength to salvage their weak industries. Peugeot Citroen, Ford or General Motors and now Tata Steel are typical.
 
Which c

Which coutries are pure market economies, i.e no interference of goverment into economic activities. There is no coutry like that.

Increasingly, western government have to use their financial strength to salvage their weak industries. Peugeot Citroen, Ford or General Motors and now Tata Steel are typical.

True, most economies nowaday are mixed economies. But not all mixed economies are the same, it also depend on degree of govt intervention. Some country govt hold too much power they interupt a lot more & unnecessary and disrupt the market mechanism and cause crowding out efect in market
 
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China is a hybrid economy; an effective one at that. A true free market economy does not exist, just like true communism does not and can not exist. If a true free market economy is determined solely on the market without any government leverage and assistance, then that is economic anarchism, which is why the United States have to flood its own economy with trillions of inflated 'copy-paste' dollars to prop up a whole bunch of their failing "too big to fall" companies--is that 'free market'? If it really is free market, then let the market decide which company rise and fall, right? But that is not the case. Obviously.

Europe not granting China 'Market Economy' status has little to do with the actual meaning of Market Economy but it is a political move. We need to stop looking at these events at face value, nothing is ever at face value in geo-pollitics, and everything have to do with geo-politics.

If all developing and poor countries followed the Western dictated 'free market economy' then they are condemning themselves to economic subjugation by the same ex-European colonial powers who all have fully established economies--this is a good thing for the US and Europe, but why would anyone want that? Follow China's lead if you are a developing nation, protect your industries, develop your own brands and companies. It's totally fine if the United States and Europe get red-faced mad and frustrated.
 
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China is a hybrid economy; an effective one at that. A true free market economy does not exist, just like true communism does not and can not exist. If a true free market economy is determined solely on the market without any government leverage and assistance, then that is economic anarchism, which is why the United States have to flood its own economy with trillions of inflated 'copy-paste' dollars to prop up a whole bunch of their failing "too big to fall" companies--is that 'free market'? If it really is free market, then let the market decide which company rise and fall, right? But that is not the case. Obviously.

Europe not granting China 'Market Economy' status has little to do with the actual meaning of Market Economy but it is a political move. We need to stop looking at these events at face value, nothing is ever at face value in geo-pollitics, and everything have to do with geo-politics.

If all developing and poor countries followed the Western dictated 'free market economy' then they are condemning themselves to economic subjugation by the same ex-European colonial powers who all have fully established economies--this is a good thing for the US and Europe, but why would anyone want that? Follow China's lead if you are a developing nation, protect your industries, develop your own brands and companies. It's totally fine if the United States and Europe get red-faced mad and frustrated.

And that's why china economy is mess
 
just because bananas are not China's main export doesn't mean their economy is in a mess

hahahaha you chinese troll have no ideas about the Philippines and you go back to name calling and insult typical uncivilized chinese arrogance the queen was right you people are very rude indeed
 
hahahaha you chinese troll have no ideas about the Philippines and you go back to name calling and insult typical uncivilized chinese arrogance the queen was right you people are very rude indeed

As if you have any ideas of China economy. Calling China economy is a mess just show your ignorant and really a banana country. :lol: We still have 3 trillion USD sitting in our pocket and how many you have? I know you have more banana than China have :lol:

The British Royal family gives VIP treatment to our president Xi using gold plated horse carriage to ferry him which only your head of state can dream of. :D
 
As if you have any ideas of China economy. Calling China economy is a mess just show your ignorant and really a banana country. :lol: We still have 3 trillion USD sitting in our pocket and how many you have? I know you have more banana than China have :lol:

The British Royal family gives VIP treatment to our president Xi using gold plated horse carriage to ferry him which only your head of state can dream of. :D

ya its pretty bad and not just that you pollution problems is still worse so good luck with that
 
ya its pretty bad and not just that you pollution problems is still worse so good luck with that
As if you Philippine is better. I can bet Philippine river and water is worse than China. The foul street full of rubbish are far more horrible than China. How many handout you always beg from others when disaster struck. Many poor Pinoy kids and families always dig rubbish heap for food. You Pinoy are fame for that. Nothing will change it with the stupid alliance with US.
 
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