The European Steel Association (EUROFER) has announced that the European Commissioners held an Orientation Debate today, on how to proceed with China’s request to grant it market economy status (MES), following the EU-China summit last week at which policy makers attempted to equate reductions in steel overcapacity with the granting of the much-coveted MES designation.

Regarding the Orientation Debate, EUROFER director general Axel Eggert stated that Chinese overcapacity should not be confused with the granting of MES to the country. According to Mr. Eggert, the concern is rather that prematurely according the status would give Chinese producers an even greater unfair competitive advantage, and therefore MES must not be granted straightforwardly so long as China does not visibly meet each of the EU’s five market economy criteria.

The EU’s five economic criteria are as follows:

• the elimination of barter trade in the economy,
• government non-intervention over allocation of resources and decisions of enterprises,
• transparent and non-discriminatory company law (adequate corporate governance),
• functioning property law & bankruptcy regime,
• genuine & state-independent financial sector.