The 18th EU-China summit that took place on 12-13 July in Beijing was held against the background of the landmark Hague ruling on the South China Sea (SCS) and the dispute on market economy status (MES). The Hague ruling, published during the actual summit, comprehensively rejected China’s claims to enjoy sovereignty over most of the SCS and criticised China for its island building activities. Inevitable there were different views on the ruling at the summit but it did not completely dominate the agenda. The EU statement on the SCS was not as strong as some had wished which reflected differences between the Member States.
The main dispute at the summit was over market economy status (MES) with Chinese leaders arguing that it should be granted automatically under the terms of their WTO accession. EU leaders said that the EU position was still under discussion but the prospects for MES were not helped by the massive over-capacity in the Chinese steel industry which was causing political problems in several member States.
By Fraser Cameron
Just a week after the issue of market economy status dominated the EU-China summit in Beijing, the Commission discussed on 20 July the results of the impact assessment undertaken by DG Trade.
The discussion focused on the political, economic and legal implications of a decision on MES which must be taken by the end of the year. For China the matter is clear. China was promised MES 15 years after it joined in 2001. There can be no arguing – the promise must be kept. For the EU there is a strong legal view that the Chinese are in the right and failure to grant China MES would result in a lengthy fight at the WTO which the EU would probably lose.
The Global Strategy presented by Federica Mogherini to the European Council last week called for a deepening of economic diplomacy and an increased security role for the EU in Asia.
On 5 July, the EU-Asia Centre held a panel discussion on the topic of "China - The Economy and the Environment."
EU-ASIA Centre is a think tank dedicated to promoting closer relations between the EU and Asia.
27 July 2016