The European Union will grant China market economy status (MES) as long as China meets certain preconditions, said visiting EU Trade Commissioner Peter Mandelson at a press conference on Friday.

The EU recognizes the importance of this issue for China and has granted MES to selected Chinese companies, said Mandelson.

In a speech at Beijing's University of International Business and Economics on Thursday, Mandelson said, "Recognition of market economy status has to be based on objective progress. We have set out what China, in our opinion, needs to do in order to meet those criteria."

He pledged to move forward on this issue and engage in more intensive and results-oriented consultations with Chinese authorities.

The EU's executive commission issued a statement last July in which it listed four conditions to be met before the bloc grants MES.

China must ensure equal treatment of all companies on both an ad hoc basis and in terms of industrial policies, export regulations and pricing restrictions on raw materials. The equal treatment requirement also applies to bankruptcy procedures and protection of intellectual property rights.

Corporate governance must improve, increasing compliance with the existing Accounting Law to ensure the acceptability of accounting information for trade defense investigations.

Finally, the banking sector must be brought under market rules.

Under the terms of its World Trade Organization membership, China is still subject to non-market criteria when it comes to specific trade measures and often falls victim to anti-dumping measures from other countries.

Mandelson arrived in Beijing Thursday morning on his first official visit to China as the EU's trade commissioner. He met with Minister of Commerce Bo Xilai on Thursday and Vice Premier Wu Yi on Friday to discuss issues of mutual concern.

(China.org.cn by Yuan Fang, February 26, 2005)