China non-market economy

Foiled Again: China Fails to Gain Market Economy Status in the US

On the eve of US President Donald Trump’s visit to China, the trade waters have been stirred up further by a pair of rulings issued by the US Department of Commerce late on Friday, October 27.  In a 205-page memo, Commerce officials argued that China remains a non-market economy (NME) because “it does not operate sufficiently on market principles to permit the use of Chinese prices and costs for the purposes of the Department’s antidumping analysis.”  This determination was promptly employed in a case over aluminum foil, where a preliminary determination calculated that Chinese companies will need to pay antidumping duties ranging from 97-162 percent.  The debate over China’s economic status has been long and fraught.  The crux of the issue, to simplify matters significantly, is really two-fold.  First, it is about practical consequences related to classification determinations.   Second, it is about issues of identity and obligations.