China unlikely to get market economy status from India

When Chinese President Hu Jintao lands in India on Monday there would be one item on his wishlist that is unlikely to be granted by China's neighbour.

The Chinese President is likely to press for market economy status from India at the highest level as at the official level this demand has been examined and rejected.

"At the recent meeting of the Joint Working Group of officials on both sides the demand from China was examined again and rejected," official sources said.

The demand was rejected as the Indian side was unwilling to take the costs of production quoted by Chinese exporters on face value during anti-dumping investigations. This is because China gives huge amount of subsidies and other concessions to its producers thus enabling them to flood markets with cheap products.

China is, however, pressing for market economy status as whenever its exports to a country increase the Chinese companies are slapped with anti-dumping investigations. The lack of market economy status makes them a ready suspect of dumping.

India too has initiated maximum anti-dumping investigations against China. Of the 108 anti-dumping cases going on, around 80 are from China.

Official sources said the issue of India not recognising China as a market economy would not come in the way of the Free Trade Agreement between the two countries.

A Joint Task Force of officials and businessmen is studying the feasibility of FTA between the two countries and its report is expected to come by October next year.

A large part of the Chinese trade diplomacy after its accession to the World Trade Organisation (WTO) in 2001, revolves around getting market economy status from its trading partners.

China had joined WTO as a non-market economy and would remain so till 2016. It was, however, given an option to get that status from individual countries. So far around 60 countries recognise China as a market economy, but biggest trading powers like United States, the European Union and Japan are yet to do so.


Source: TOI
 
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