CHINA TOPIX

11/02/2024 09:38:14 am

Make CT Your Homepage

US Refuses to Grant China a Market-Economy Status

The Obama administration has denied China a market-economy status, according to a US senior official.

(Photo : Getty Images) The Obama administration has denied China a market-economy status, according to a US senior official.

The US government will not grant China the official market-economy status that Beijing insists it deserves, a decision that would likely ramp up the tensions between the two world super powers, as Beijing lobbies the US and other countries to lower import tariffs.

Like Us on Facebook

Beijing insisted that under the World Trade Organization (WTO)'s terms, the US and other members are obliged to grant it a market-economy status on the 15th of its WTO accession. The US, however, disagreed.

"The United States is not changing China's status as a non-market economy," a senior US administration official revealed in an interview. "China's protocol of accession to the WTO does not require the United States or any other member to automatically grant it market-economy status after Dec. 11, 2016," the official added.

Winning a market-economic status can help massively lower the tariffs that WTO members can levy in cases where another country is charged with violating trade terms.

Meanwhile, incoming President-elect Donald Trump is also not expected to reverse the decision. This is especially considering that Trump has even promised to place higher tariffs on Chinese imports. In fact, during his election campaigns, Trump even blamed Beijing for many of the ills plaguing America's economy.

On the other hand, the Obama administration has told China to submit a formal complaint challenging its decision, an action Beijing is yet to take.

"If China wants to benefit from treatment as a market-economy country, it must change its own practices to let the market play its role in the economy," the US official said in his interview.

Tensions between the two nuclear powers have intensified in recent years, with the Obama government filing numerous dumping and counter-valuing duties on Chinese imports.

The Chinese goods that have been affected by the measures include shrimp, steel, and solar cells industries. Those strains are expected to ramp up after Trump assumes power next year.

Real Time Analytics