EU's 'market distortion' claim against China a serious mistake: commerce ministry

The EU's unilateral adoption of so-called "market distortion" criteria to evaluate China's economy is a serious mistake and severely undermines the authority of the WTO rules system, a spokesperson for China's Ministry of Commerce (MOFCOM) said Thursday, while calling for an immediate halt to this wrong approach from the EU.

The European Commission (EC) updated a report on Wednesday alleging "significant state-induced distortions" in the Chinese economy, which will be noted in trade remedy investigations. This is the second time this claim has been made since 2017 when the report was first published.

Responding to media questions about the EU's move, a MOFCOM spokesperson said on Thursday the report was subjective, one-sided, and an erroneous assessment of China's socialist market economy, serving as a pretext for adopting discriminatory anti-dumping measures. China strongly opposes this, the spokesperson said.

The head of the Trade Remedy Bureau of MOFCOM immediately lodged solemn representations with the European side regarding this issue.

China has, based on its specific circumstances, explored and established a socialist market economy system, which has led to remarkable achievements, the spokesperson said.

The socialist market economy system in China continues to be improved and developed, with the market playing a decisive role in resource allocation. Meanwhile, government intervention helps to fully unleash the vitality of economic development, and promote the development of productive forces and the improvement of people's living standards, the spokesperson said.

There isn't just one model of a market economy; it's intertwined with the history, culture, and current national conditions of each country, the spokesperson said.

MOFCOM said that the EU's unilateral adoption of so-called "market distortion" criteria to evaluate China's market economy is a serious mistake.

Moreover, it seriously violates the WTO rules system.

The WTO rules do not have the concept or standards of "serious economic distortion." By breaking WTO rules and using the so-called "market distortion" claim, the EU has severely undermined the authority of the WTO rules system, concocting excuses for its continued use of the anti-dumping "substitute country approach," which is not allowed by WTO rules.

As an important member of the WTO, the EU should respect and uphold the authority of the multilateral trading system and immediately cease its erroneous practices that violate WTO rules, the spokesperson noted, adding that China will closely monitor the EU's subsequent actions and reserves the right to take all necessary measures.

The EU's report came just a day after its decision to probe Chinese wind turbines, the latest example of the intensified tendency toward protectionism in the EU. The move aroused concerns among Chinese companies doing business in the bloc, with the Chinese business group in the region expressing strong dissatisfaction at the lack of transparency in the EU's intervention.

The EU has recently ramped up its trade protection measures against China, including launching probes into Chinese-made electric vehicles. The bloc has also joined the U.S. in criticizing China's production of affordable electric cars.

Experts said that there is a clear politically driven motivation behind the EU probe, with the U.S. taking the lead.