Creating a level-playing field for EU trade with China. 26 April 2013

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Is China playing by the rules? "Based on WTO rules, China's full market economy status will be recognised by If EU nations can demonstrate their sincerity several years earlier, it would be the way a friend treats a friend", "European countries are facing sovereign debt problems and we've expressed our willingness to give a helping hand many times. We will continue to expand our investment there", he said. Former Chinese premier Wen Jiabao 5

Does the Commission believe China is playing by the rules? “Progress on this issue is possible as China meets clear technical criteria. Most laws in China are in place, but there needs to be more progress on the implementation and enforcement of these laws. “ "As this is clearly up to China, then it also follows that the timing of the conclusion on its market economy status is also largely in China's hands.“ Commissioner de Gucht 6

“China is a market, and has a formidable economy. China is not however a market economy. It is an economic system locked by the state and padlocked by the Communist Party, " Guy Verhofstadt, President of ALDE. 7 Do European politicians believe China is playing by the rules?

EUROPEAN PARLIAMENT Trade and economic relations with China June 2012 “In a 2011 report, the Commission concluded that China had only fulfilled one of the five criteria required by the EU to gain MES status. No appreciable progress appears to have been made by China in the other areas since the Commission report was published last year. China has recently threatened to retaliate against the EU's refusal to recognise the country as a full-fledged market economy. China has warned that its willingness to acquire sovereign bonds in the Euro area would be linked to the question of the EU's position on the MES matter 4” EUROPEAN PARLIAMENT DIRECTORATE-GENERAL FOR EXTERNAL POLICIES, POLICY DEPARTMENT POLICY BRIEFING Trade and economic relations with China June

EU Criteria for Market Economy Status “1. Low degree of government influence over the allocation of resources and decisions of enterprises, whether directly or indirectly (e.g. public bodies), for example through the use of state-fixed prices, or discrimination in the tax, trade or currency regimes. 2. Adequate corporate governance (application of international accounting standards, protection of shareholders, public availability of accurate company information). 3. Effective bankruptcy laws which ensure the respect of property rights and the operation of a functioning bankruptcy regime. 4. The existence of a genuine financial sector which operates independently from the state.” 9

Your commentators today Is there a level-playing field for EU trade with China? Is China playing by the rules? Is the EU playing by the rules? Are there any ‘doped’ players? Who are the winners and losers in this game? What should the referees be doing? 10 Mark Dober Ines Van Lierde Roberto Bendini Milan Nitzschke