EU lawmakers on Thursday overwhelmingly passed a non-legislative resolution that refuses to recognize China's market economy status as set out in global trade rules. The European Parliament members instead proposed the use of the term "substitute country" in anti-dumping investigations against China... now the EU's second-biggest trading partner. Why does the EU refuse to recognize China's market economy status?

546 votes in favor and 28 against... the European Parliament urging the EU not to grant China a market economy status.

China joined the World Trade Organization in 2001. Under the protocols covering the country's accession, China's status should automatically transit to that of a market economy for Europe by December 11th this year.

But many EU lawmakers say China fails to meet the five criteria defining a market economy.

However, simply by browsing through the list of countries that the EU has already recognized as market economies, it appears the same standards have not always been applied in EU decisions to grant the status.

Another reason the EU lawmakers are refusing to recognize China as a market economy is that they fear such an endorsement would harm certain industries within the bloc, especially in southern European countries, where steel, textile and other manufacturing sectors have been hard hit. More competitive manufacturing countries such as the UK and the Netherlands have voiced their support for granting China the status.

The non-market economy status of China has often become a convenient weapon for trade protectionists.

Bilateral trade between China and the EU has been growing quickly despite the lower-level status. China is now the EU's second largest trading partner, with daily trade surpassing 1 billion US dollars.

As many experts have pointed out, in the long run, the EU has more to gain than lose by designating China as a market economy.