It will be a "tragedy" for the world's economy if the European Union (EU) decides not to grant China market economy status (MES), in view of the nation's huge impact on global economic, financial and trade matters, according to a chief economist in Britain, saidJan Randolph, with the London-based World Market Research Centre.

Randolph said granting China a MES would put it in the same bracket as all Western industrialized countries, including the US, the EU and Japan.

"It would be more difficult for the EU, US and Japan to complain about 'unfair competition,' or impose anti-dumping measures," he said.

But a refusal to grant a MES would mean that the EU, the US and Japan could not talk to China about important global policy issues at the highest levels, even though China deserved input due to its huge and growing importance globally.

Randolph said: "The Chinese may feel that they are being unfairly excluded and may take retaliatory measures."

A confidential, 15-page report by the European Commission allegedly says the EU "is committed to granting market economy status to China," but believes China has so far only fulfilled one of the five criteria necessary.

When asked what impact a negative EU decision would have on bilateral trade relations between the EU and China, Randolph said trade relations would continue to develop and expand, "but that they were "more likely to develop faster if China was included in the 'market economy group.'"

Any "cooling" economic policies adopted by China will affect many other countries, including market economies and their growth, he said.

Refusing China the possibility of dealing with global economic issues on an equal footing would harm healthy global economic growth.

"Also, China represents one of the fastest growing markets for the EU in terms of goods and investment, Randolph said.

"There have been many visits between Chinese and European leaders over the last few years - quite rightly - as this reflects the growing business contacts, trade and investment opportunities that benefit both sides."

When asked whether any external elements other than economic ones would affect the EU's decision, Randolph said the EU was big and independent enough to make its own decision, "just like on the Kyoto treaty, Iraq and the International Criminal Court".

As to whether a negative decision would mean that a number of high quality and cheap Chinese goods would be blocked from entering the EU, Randolph said even under that scenario, he did not think the EU would adopt more anti-dumping measures against Chinese products.