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China faces battle over 'market economy' status


12-12-2016 03:27 BJT

Granting China 'market economy' status is quite an important issue, as anti-dumping and anti-subsidies laws apply differently to economies. There is one provision in the Chinese WTO Accession Protocol which deals with dumping. It allows other WTO members to use the surrogate country's production costs as a benchmark in deciding if a country is dumping or not. But it also says that the provisions shall expire 15 years after the date of accession.

A refusal to recognize China as a market economy means it would continue to suffer from high tariffs in its exports. Take the 2011 anti-dumping case against China's soy protein as an example. The EU said Chinese companies were dumping because it chose the US as its surrogate country -- whose production costs were much higher -- for calculating China's production cost.

So far over 80 economies have granted China "market economy" status, including New Zealand, Australia, and Switzerland. WTO data shows that among the 5,000 or so anti-dumping cases launched globally, nearly one-fifth were against China.

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