29 April 2016 / AEGIS Europe, the industry alliance uniting 30 European industry associations from steel and textiles to bicycles and ceramics, welcomes the statement made by Sigmar Gabriel, German Vice Chancellor and Minister for Economic Affairs, against granting China Market Economy (MES) Status until it abides by the rules.
In yesterday’s debate on the steel crisis and Chinese dumping in the German Parliament, Minister Gabriel said, "China cannot be granted Market Economy Status if China does not abide by the rules of market economies ... We need to enforce the rules of trade and fair competition, and we cannot give Market Economy Status to countries that are obviously not market economies." He continued: "When there is fair competition the best prevail, not those with abysmal wages, the worst environmental standards and those who are receiving support from the state to flood the market."
Milan Nitzschke, spokesperson for AEGIS Europe welcomed the remarks by the German Vice Chancellor and Minister for Economic Affairs saying: "Mr Gabriel’s statement is a clear and strong message to the European Commission, which is currently considering granting China Market Economy Status. It is also a clear signal to China that dumping in Germany and in the EU cannot be tolerated, and that Chinese companies must respect international trade rules."
The Government of the People's Republic of China claims that the EU should recognise China as a market economy by the end of this year due to their interpretation of a clause in their WTO Accession Protocol. Granting China MES would strip Europe of its ability to impose effective measures against Chinese dumping. The steel industry along with all European manufacturing industries would be rendered defenceless and subject to unfair competition from China. Dumping, which is the sale of goods below the cost of production, has already led to the loss of hundreds of thousands of jobs in industries such as steel, aluminium, fibre glass and solar technology in Europe in recent years. According to the independent study from Economic Policy Institute, if China were to be granted Market Economy Status, up to 3.5 million jobs could be at risk.
Mr Nitzschke concluded, "China is as far from being a market economy as Pluto is from Earth. The Chinese government builds up overcapacities in key industries and this strategy is outlined in its five-year plans. This leads to overproduction. Products are then sold at below the cost of production in export markets. Companies in the EU, which operate according to the rules of market economies, do not stand a chance against government-funded dumping. Nevertheless, parts of the European Commission are considering granting China Market Economy Status. This makes yesterday’s statement against dumping and for fair competition by the German Minister for Economic Affairs all the more important. "