FM urges Germany to back China's acceptance as market economy

Beijing sent a strong signal to the European Union to scrap protectionism with Foreign Minister Wang Yi calling on Germany to prompt the EU to redress a lapse in World Trade Organization protocol.

Meeting with Wang on Thursday, German Vice-Chancellor and Foreign Minister Sigmar Gabriel said Berlin would help promote talks on the China-EU Bilateral Investment Treaty and welcomed Chinese investment.

The meeting on the sidelines of the G20 foreign ministers meeting in Bonn raised the issue of protectionism, which clouds the EU's ties with its second-largest trade partner, China.

Wang told Gabriel that China hopes Germany will further play an active role in prompting the EU to honor at an early date Article 15 of the Protocol on China's Accession to the WTO.

According to Article 15, the use of the "surrogate country" approach in anti-dumping probes against China should have expired on December 11.

Through that approach, WTO members use the costs of production in a third country to calculate the value of products from countries on a "non-market economy" list, permitting high tariffs to be levied in trade disputes.

The surrogate country approach leads to discriminative antidumping probes and has triggered widespread complaints by Chinese businesses, observers said.

The EU failed to comply with Article 15, and China launched dispute settlement procedures in December at the WTO by requesting consultations with the EU and the United States.

Cui Hongjian, director of the European Department at the China Institute of International Studies, said what the EU had done "posed a barrier to reinforced China-EU trade cooperation".

Although China has sought WTO dispute settlement procedures, Wang indicated on Thursday that Beijing was willing to resolve this issue in a bilateral context, Cui said.

Cui said it was time for the EU to rethink the issue as it faces a changing trade landscape, and the administration of US President Donald Trump was pressuring the EU on trade and financial issues.

Chen Fengying, a senior researcher on world economy at the China Institutes of Contemporary International Relations, said the EU's failure to honor Article 15 sabotaged equality and affected talks on the China-EU Bilateral Investment Treaty.

Germany's hosting of the G20 meetings this year provides a good chance for it to work with China, the host country last year, to promote fair trade, Chen said.

In another development, media have speculated that Wang and US Secretary of State Rex Tillerson could possibly meet this week.

Analysts said the two countries should seize the chance to talk on key topics, such as the South China Sea issue, to keep their relations on track.

Amid simmering tension on the Korean Peninsula, the meeting of the US and Chinese diplomats would be the first high-level one since Trump took office on Jan 20.

When asked on Thursday whether they would meet on the sidelines, Foreign Ministry spokesman Geng Shuang said he had no information on the matter.

On issues likely to be raised at the potential meeting, Wu Xinbo, director of the Center for American Studies at Fudan University in Shanghai, said China would focus on the South China Sea situation.

Fan Jishe, a researcher of US studies at the Chinese Academy of Social Sciences, said the meeting was needed to outline the diplomatic road map for working-level contacts.