The European Union will not give China market economy status after an "initial assessment", reported CCTV on June 28.

Sources say this "technical report" highlights four loopholes in China's market economy system, ranging from legal system and resources imports and exports to IPR (intellectual property rights) protection and the financial sector, especially financing of SOEs.

Chinese Premier Wen Jiabao and EU President Prodi agreed during Wen's visit to Brussels in May that recognition of China's market economy status would benefit both China and EU. Prodi told Wen then that the initial assessment would not affect the final result.

But the result of the initial assessment is somewhat disappointing to China as expectation for EU's recognition of China's market economy status was high before the report was issued.

EU is China's largest trade partner in the world now.

By People's Daily Online