Over the past 20-strong years of reform and opening-up, especially in recent years, China has achieved great accomplishments in developing its market economy. The level of its market economy is even higher than that in some countries who have already been granted market economy status. However, the US and the EU have not yet recognized China's market economy status. Therefore, in their anti-dumping investigations against Chinese products, they use the third country's price rather than the normal value of Chinese products, which often lead to the decision that Chinese products were dumped and then disadvantaged Chinese exports.
Next, I'm going to brief you with the sets of standards referred to by the US and the EU when judging a country's market economy status.
Section 771（18）of the Tariff Act of 1930, as amended, directs the Department of Commerce (DOC) to consider 6 factors when making a non-market economy country determination. These factors are listed in Section 771（18）.
（1）The extent to which the country's currency is convertible into the currencies of other countries;
（2）The extent to which wage rates are determined by free bargaining between labor and management;
（3）The extent to which joint ventures or other investments by firms of other countries are permitted;
（4）The extent of government ownership or control of the means of production;
（5）The extent of government control over the allocation of resources and over the price and output decisions of enterprises; and
（6）Such other factors as the administering authority considers appropriate.
The above-mentioned six factors refer to a country's market economy status while the US government has three tests, specifically designed to judge whether a specific industry is a market-oriented industry（MOI）. They are as follows:
（1）For merchandise under investigation, there must be virtually no government involvement in setting prices or amounts to be produced;
（2）The industry producing the merchandise under investigation should be characterized by private or collective ownership. There may be state-owned enterprises in the industry but substantial state ownership would weigh heavily against finding a market-oriented industry;
（3）Market-determined prices must be paid for all significant inputs, whether material or non-material (e.g., labor and overhead), and for an all but insignificant proportion of all the inputs accounting for the total value of the merchandise under investigation.
1. Decisions of firms regarding costs, prices and inputs, including for instance raw materials, cost of technology and labor, output, sales and investment are made in response to market signals reflecting supply and demand and without significant State interference in this regard, and costs of major inputs substantially reflect market values;
2. Firms have one set of clearly audited accounting records which are independently audited in accordance with international accounting standards and are applied for all purposes;
3. The production costs and financial situation of firms are not subject to significant distortions carried over from the former non-market economy system, in particular in relation to depreciation of assets, other write-offs, barter trade and payment via compensation of debts;
4. The firms concerned are subject to bankruptcy and property law which guarantee legal certainty and stability for the operation of the firms, and
5. Exchange rate conversions are carried out at the market rate.