Zhao Qizheng, former director of China's State Council Information Office, questions the European Parliament's resolution not to grant China market economy status. Yan Dongjie / China Daily

Chinese see vote on market status as unreasonable, and companies are ready to shelve investment plans, former official says

The European Parliament's decision to deny China market economy status is an unwise decision that goes against the interests of both sides, especially those of European countries, former director of China's State Council Information Office Zhao Qizheng said last week.

"The European Parliament should read the World Trade Organization articles thoroughly and carefully, according to which they can only deny the market economy status of certain companies but not China as a country," said Zhao.

The nonbinding resolution passed on May 12 by the European Parliament urged the European Union not to grant China market economy status, citing China's failure to fulfill five EU criteria.

Zhao questioned the resolution at the Beijing launch ceremony for Silk Road Ark, a transnational think tank focusing on the Belt and Road Initiative, where he discussed the problem with Massimo D'Alema, former prime minister and minister of foreign affairs of Italy.

"Will you be so kind as to talk to the European Parliament about the concern as you have more say back in Europe?" asked Zhao, joking and pushing for a response from the European side.

In a speech, D'Alema noted the significance of the Belt and Road Initiative, a development strategy and framework proposed by President Xi Jinping in September 2013. The initiative refers to the Silk Road Economic Belt and the 21st Century Maritime Silk Road and uses trade and infrastructure projects to link Asia, Europe, Africa and other areas.

The Belt and Road Initiative "has created more opportunities for a joint development of China and European countries", said D'Alema, adding that trade between the two sides has grown dramatically in the past 40 years, now reaching 1 billion euros ($1.12 billion) a day.

In response to Zhao's thoughts, D'Alema said he hoped that Europe and China would solve the problem in the near future, and that European countries and China should respect each other; deepen their partnership for peace, growth, reform and civilization; and promote communication and cooperation in various fields.

"It's the European Union that benefits most from the ambitious initiative," said D'Alema, adding that he looked forward to the difference that the Belt and Road Initiative would make among Eurasian countries.

"The wrong decision has had a bad influence in China, as Chinese see it unreasonable and Chinese companies are stopping investing in or funding Europe," Zhao said.

Long Yongtu, China's former chief negotiator for World Trade Organization entry, expressed points similar to Zhao's after the resolution passed.

"It goes against globalization and signals the heavy presence of trade protectionism across the world. ... A country does not need anyone else to recognize whether it is a market economy or not," said Long, adding that China's entry into the WTO has given people in many countries access to both inexpensive and fine-quality Chinese products.

A resolution passed by the European Parliament is nonbinding, while the later decision of the European Commission would have the force of law, according to Zhao.

In 2005, Zhao said, the investment in Europe from China totaled $7.2 billion, about 10 percent more than Europe's investment in China, which marked a close trading relationship between the two sides.

Zhao predicted that the European Commission will perceive the negative influence on the European economy, and reverse the European Parliament's stance.

"Just as D'Alema said, if they went on with the resolution, European countries, especially the big economies, would suffer. A good horse should turn around to graze on good pasture," Zhao said.

yandongjie@chinadaily.com.cn