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File photo of EU headquarters in Brussels， capital of Belgium. (Xinhua)


by Shuai Rong


BRUSELLES， May 14 (Xinhua) -- EU Denying Market Economy Status (MES) to China would be a strategic mistake， and it may well cause deterioration of political relationship between EU and China， Luigi Gambardella， president of ChinaEU， a business-led association， said in a recent interview with Xinhua.


In a non-legislative resolution on Thursday， the EU lawmakers were opposed to recognizing China's MES as set out in global trade rules.


China joined the World Trade Organization (WTO) in 2001. Under the country's accession protocol， China will automatically transit to a market economy status for Europe by Dec. 11， 2016.


Gambardella told Xinhua that if the EU denies MES to China， in the short term， there are concrete risks of retaliation from the Chinese side， causing EU economies serious pain and uncertainty on what will be the end result.


"It could threaten the positive outcome of the ongoing negotiations for the bilateral investment treaty and the potentiality to conclude a FTA between China and the EU - which according to Commission estimates could raise European prosperity by 250 billion euros，" said the president.


"Moreover China is the first， and only， non EU country which has so far generously committed to invest in the Juncker Plan，" he stressed. Closing the door to China may thus have "very negative" effect.


One of the main drivers of the MES debate is the fear of job losses in Europe's less competitive manufacturing industries.


Gambardella believes it is time for the EU to reflect on why its ability to compete with other economies is getting worse in many sectors.


"One of the reasons no doubt， lies in the burden of EU over-regulation， which hampers overall industrial ability to innovate and invest，" Gambardella said.


According to him， the EU could face negotiations in a stronger position when it comes to defend its industry and the jobs of European citizens: there would probably be fewer dumping disputes if European governments would proceed with the necessary structural reforms， and if market players could enjoy better competitiveness conditions.


"With China， what needed is more dialogue， not less. We need to find win-win solutions rather than to start a new fight. Today the key word is cooperation，" he told Xinhua.


Earlier this year， Chinese Foreign Ministry spokesman Hong Lei has urged the EU to obey the WTO rules and stop its unfair treatment towards China.


The EU is an important member of the WTO， a vital supporting force to the multilateral trade and international legal systems， Hong said， adding that China hopes the EU will fulfill its commitments to China's entry into WTO.


Gambardella said a wise decision should be to adopt a forward looking political approach， whereby granting MES could be used by the European institutions to strengthen the bilateral dialogue with the Chinese authorities in support of the institutions' endeavor to facilitate the business activities of EU companies in China.


"As the saying goes， the best way to win a dispute is to avoid it. History has demonstrated that dialogue and cooperation， not conflict， are able to overcome misunderstandings and reduce distances. Europe must not to be afraid of China. Fear is a bad advisor，" he said.


ChinaEU is a business-led association headquartered in Brussels that aims to strengthen joint research and business collaboration and investment in the sectors of Internet， telecommunications and high-tech between China and Europe.


Related:


Commentary: EU should rethink resolution on China's market economy status


BEIJING， May 13 (Xinhua) -- European Union lawmakers' vote against granting market economy status (MES) to China sends a worrying signal that one of the world's most important trade relations risks deteriorating.


The EU Parliament said in a resolution on Thursday that China's excess production capacity and cheap exports are hurting EU jobs， urging the European Union not to grant China the MES.Full Story


Commentary: EU lawmakers' refusal to recognize China's market economy status biased， myopic


BEIJING， May 13 (Xinhua) -- In a move that clearly bows to industry lobbyists， the European Parliament on Thursday passed a resolution urging the European Union (EU) not to grant China a market economy status， which reflects a kind of bias and myopia.


Though it is non-binding， the very fact that an overwhelming majority(with 546 votes in favor and 28 against) of EU lawmakers refuse to recognize China as a market economy may as well cast a shadow on China-EU trade ties， which have been thriving for years and produced tangible benefits to both sides.

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