Rapid growth in trade with the European Union should help China gain recognition as a market economy. Some experts believe that the EU is likely to be the first of the world's three main economies-the United States, the EU and Japan-to provide that recognition.

Professor Li Xiaoxi of Beijing Normal University led the team that wrote the Report on the Development of China's Market Economy 2003, and was also a member of the delegation that lobbied the EU over this issue in early 2004.

Li is reluctant to speculate as to a timetable, however. After discussing the matter with officials from the EU and member countries, he concluded that the major EU nations all support China's MES request, but they will wait for a final decision from the EU.

The General Administration of Customs reports that the newly enlarged European Union has overtaken Japan as China's biggest trade partner during the first five months of this year. Bilateral trade reached US$65.7 billion, up 35.9 percent year-on-year. That figure represents 15.5 percent of the country's overall foreign trade of US$423.8 billion for the five months.

The average tariff level in EU is quite low but non-tariff barriers, especially anti-dumping measures against Chinese products, greatly hampered bilateral trade.

The Ministry of Commerce indicates that the EU has initiated nearly 100 anti-dumping cases since 1979, involving over US$4 billion worth Chinese products, mainly home appliances and textiles.

In 1998, the EU announced the de-listing of China from its non-MES countries. It viewed China as a transitional economy, which enables Chinese enterprises to debate MES recognition in specific cases.

China requested full recognition of MES from the EU one year ago. In February, a delegation from the Ministry of Commerce paid a visit to the EU to lobby the issue.

European Commission President Romano Prodi said during his China tour in April that the EU is studying China's MES, and the preliminary judgment will come out in June. He also told Premier Wen Jiabao that the EU would take work diligently to resolve the issue as soon as possible.

(China.org.cn by Tang Fuchun, June 21, 2004)

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