The European Union (EU) flag is seen on a sunny day and blue sky at the Chancellery in Berlin, Germany, April 29, 2016. REUTERS/Fabrizio Bensch - RTX2C61P

BRUSSELS (Reuters) - EU lawmakers overwhelmingly rejected on Thursday any loosening of the bloc’s trade defenses against China without reforms of its economy, including a reduction on state influence over business.

The European Union is debating whether to grant China “market economy status” (MES) from December, which Beijing says is its right 15 years after joining the World Trade Organization.

While the vote was on a non-binding resolution only, the European Commission will need parliament’s approval if it proposes according China MES.

Market economy status would make it harder for Europe to impose anti-dumping duties on Chinese goods sold at knock-down prices because it would change the method for determining a fair price.

Some 546 members of the 751-strong European Parliament voted for the resolution, which said that Europe should continue to treat China as a special case until it met all five criteria the European Union established to define market economies.

One specifies a reduced role for Beijing in business decisions.

The parliament's resolution also referred to China's overcapacity in steel and its cheap exports, part of the reason for Tata Steel's TISC.NS decision to sell its entire British steel operations, threatening 10,000 jobs.

The Commission is expected to come up with a proposal on China’s trade status by July. Its options are: do nothing, grant China MES or grant the status with mitigating trade measures.

Thursday’s resolution also urged member states to back proposed changes to EU trade defenses, such as axing the “lesser duty rule” which limits the tariffs the bloc can set. Some EU members, including Britain, believe this rule should stay.