TOKYO -- The Japanese government intends not to recognize China as a "market economy" under the World Trade Organization without changes to the country's policies, a stance that will leave tariffs as a ready option for Tokyo against unfairly cheap Chinese exports.
The U.S. and the European Union have indicated they will take the same approach. Japan seeks a united front with other advanced economies to pressure China to deal with its steel oversupply and other economic distortions.
China, which joined the WTO in 2001, is pushing to gain automatic market economy status effective Dec. 11 after the expiration of a 15-year provision that lets trade partners treat the nation as a non-market economy.
Continuing to treat China in this way would let Japan use third-country prices as a benchmark to determine whether Chinese producers are engaging in dumping, or exporting products for less than they sell in the home market. This would make for easier determinations -- and retaliatory action with anti-dumping tariffs --- than relying on China's opaque domestic prices as a reference.
China has indicated it may retaliate as well in response to tariffs by countries that do not recognize Beijing's market economy status.