The European Commission , the EU 's executive arm, has given itself until this summer to decide on whether to grant China the designation that would make it much harder for major economies to fight Beijing over alleged unfair trading practices.
But Commissioner Vytenis Andriukaitis, Lithuania's representative to the EU executive, told European lawmakers in Strasbourg that the Commission all but ruled out the option of granting China the status, given the consequences.
"Our analysis of this option so far and the feedback from many stakeholders show that it would involve a very high cost in terms of potential job losses in the European Union," Andriukaitis, who is officially health commissioner, told the MEPs.
"Even without the current climate of overcapacity, any such move would be untenable," he said, adding that the commission would discuss the issue again before this summer.
"This approach would help ensure that the dumping margins calculated would, for the most part, reflect the ongoing distortions in the Chinese economy more accurately," he said.
The issue has become extra sensitive amid a world steel crisis caused by overcapacity in China , the world' top steel producer.
"The most important question is not whether we should yes or no give China market economy status, but jobs," said David Caspary, MEP from the right-of-centre EPP group, the biggest party in parliament.
"We do have a strategic partnership with China , but we should be able to defend ourselves," he said.