Until now, Russia, Brazil, Switzerland, Australia and New Zealand have granted market economy status to China. But the US and European economies are reluctant to follow suit.

The United States is keen on refusing China's market economy status because it claims it fears Chinese companies will flood American markets with unfairly cheap goods. The US has warned China that it hasn't done enough to deserve market-economy status, in particular on the issues of excess steel and aluminum production.

China’s agreement on accession to the World Trade Organization in 2001 stipulated that China would automatically be designated a market economy on December 11th, 2016. EU Commission Vice President Jyrki Katainen says the EU is willing to fulfil its legal commitment for automatic MES for Beijing, but he also acknowledges that it's difficult to do free trade as long as overcapacity is harming fair trade.

European Commission President Jean-Claude Juncker said at the China-EU summit last week that the European Union's decision on whether or not to recognise China as market economy is linked to Beijing's success in cutting steel overcapacity. Still, Italy, Spain and Germany have all expressed their doubts about granting China's market economy status at this stage.