The European Union has refused to grant China the coveted Market Economy Status (MES) following a request submitted by Beijing last June, the bloc's executive Commission said on Monday.

According to agency's reports quoted by Tuesday's China Daily, the EU's head office said Beijing needed to make progress in four key areas before winning the coveted Market Economy Status, said Arancha Gonzalez, spokeswoman for trade issues.

"We believe there is work to be done from the Chinese in the financial sector, in corporate and banking law, in state interference and in property law," Gonzalez said.

China had asked the Commission for MES last June and provided follow-up information in September and again this year, and the Commission had agreed to give a preliminary assessment by the end of June.

The Commission said in a statement that four conditions must be met before the bloc will grant MES. They are:

* State influence -- ensuring equal treatment of all companies by reducing state interference, either on an ad hoc basis or as a result of industrial policies, as well as through export and pricing restrictions on raw materials.

* Corporate governance -- increasing compliance with the existing Accounting Law to ensure the usability of accounting information for trade defense investigations.

* Property and bankruptcy law -- ensuring equal treatment of all companies in bankruptcy procedures and in respect of property and intellectual property rights.

* Financial sector -- bringing the banking sector under market rules.

China is seeking to secure the status, which would make it more difficult for its trading partners to impose penalties on dumping of Chinese exports.

Four countries - New Zealand, Singapore, Malaysia and Thailand - have already granted China market economy status.

Source: CD/Agencies