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News&Events

Press Release

China Market Economy Status plan must enshrine five economic tests

Brussels, 20 July 2016 – European Commissioners are holding an Orientation Debate today on how to proceed with China’s request to grant it Market Economy Status (MES). The Orientation Debate follows an EU-China summit last week at which policy makers attempted to equate reductions in steel overcapacity with the granting of the much-coveted MES designation.

“Chinese overcapacity should not be confused with the granting of MES to the country. They are distinct issues. The concern is rather that prematurely according the status would give Chinese producers an even greater unfair competitive advantage”, said Axel Eggert, Director General of the European Steel Association (EUROFER).

“Straightforwardly, MES must not be granted so long as China does not visibly meet each of the EU’s five market economy criteria”, added Mr Eggert.

The EU’s five economic criteria are:

  1. Elimination of barter trade in the economy
  2. Government non-intervention over allocation of resources and decisions of enterprises
  3. Transparent and non-discriminatory company law (adequate corporate governance)
  4. Functioning property law & bankruptcy regime
  5. Genuine & state-independent financial sector

“So far China has overcome just the first of the EU’s five economic tests. To ensure that economic rationality – rather than political expediency – is put at the heart of the eventual decision, any MES proposal should enshrine in legislation these established market economy criteria”, emphasised Mr Eggert.

Mr Eggert concluded, “Our call to put these five criteria at the heart of the economic decision about granting MES is in line with the overwhelming position of the European Parliament. MEPs voted convincingly against the premature change of status and urged the Commission to act in accordance with this principle.”

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Notes for Editors

Contact

Charles de Lusignan, Communications Manager, +32 2 738 79 35, (charles@eurofer.be)

About the European Steel Association (EUROFER)

EUROFER is located in Brussels and was founded in 1976. It represents the entirety of steel production in the European Union. EUROFER members are steel companies and national steel federations throughout the EU. The major steel companies and national steel federations in Switzerland and Turkey are associate members.

About the European steel industry

The European steel industry is a world leader in innovation and environmental sustainability. It has a turnover of around €170 billion and directly employs 320,000 highly-skilled people, producing on average 170 million tonnes of steel per year. More than 500 steel production sites across 24 EU Member States provide direct and indirect employment to millions more European citizens. Closely integrated with Europe’s manufacturing and construction industries, steel is the backbone for development, growth and employment in Europe.

Steel is the most versatile industrial material in the world. The thousands of different grades and types of steel developed by the industry make the modern world possible. Steel is 100% recyclable and therefore is a fundamental part of the circular economy. As a basic engineering material, steel is also an essential factor in the development and deployment of innovative, CO2-mitigating technologies, improving resource efficiency and fostering sustainable development in Europe.

WTO Commitments

A list of 10 commitments that China made upon its accession to the WTO can be found: here

PDF

A PDF of this Press Release can be found: here

The European Steel Association (EUROFER AISBL)

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