EU report alleges market distortions in Chinese economy, Beijing rebukes claims

Chinese Ministry of Commerce

11th April 2024 – (Beijing) Beijing has vociferously refuted the latest European Union report which alleges “significant distortions” in the Chinese market economy. The report, rolled out by the European Commission on the 10th of April, extends the narrative of a skewed economic landscape within China—a perspective Beijing firmly contests.

A spokesperson for the Chinese Ministry of Commerce, addressing the matter, conveyed China’s strong opposition to the EU’s assessment, which was characterised as subjective, biased, and erroneous. The spokesperson criticized the Commission for its unilateral standards outlining market distortions, which they argue are an excuse to legitimize discriminatory anti-dumping practices against China. The Ministry’s official in charge of trade remedy investigations has promptly lodged a formal protest with the European side.

The Chinese economic system, a unique embodiment of socialism with Chinese characteristics, has garnered global attention for its historic achievements. China’s assertion of a continuously evolving and improving socialist market economy, with the market playing a decisive role in resource allocation, stands in stark contrast to the EU’s claims. Beijing emphasizes that market economies are diverse and intimately linked to a nation’s history, culture, and realities, and therefore, the EU’s application of a singular model to appraise China’s economy is fundamentally flawed.

EU’s updated report, now encompassing sectors such as telecom, semiconductors, rail, renewable energy, and electric vehicles—alongside the previously included steel, aluminium, chemicals, and ceramics sectors—serves as a reference for EU industries to raise anti-dumping complaints. The Chinese government has maintained that the concept of “significant distortion” is absent from World Trade Organization (WTO) rules, and accuses the EU of undermining the WTO’s authority by perpetuating practices not sanctioned by the organization.

China’s legislative body, the National People’s Congress, has indicated that measures will be taken to address overcapacity, a concern both the United States and the European Union have recently spotlighted. Chinese state media has decried these criticisms as attempts to hinder China’s ascent on the global stage.