China, the Reluctant WTO Reformer

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In The Media

China, the Reluctant WTO Reformer

China’s 2001 entry into WTO was an epochal step in China’s reform and opening up. As the transition ended in December 2016, China had skyrocketed to become the world’s first trading nation.

By François Godement

Published on Mar 15, 2019

Source: Institut Montaigne

China’s 2001 entry into WTO was an epochal step in China’s reform and opening up. As the transition ended in December 2016, China had skyrocketed to become the world’s first trading nation. It is not hard to understand why Chinese sources (described in this issue by Pierre Sel) recognize the benefits to China from WTO membership.

In 2017, Donald Trump came to power with a program to restore the pre-eminence of the US economy. Mammoth trade deficits with China are an obvious target. Europeans, as the sources seen by Mathieu Duchâtel politely tell it, are experiencing "growth pains" in their relationship with China, now a global competitor in many sectors.

The formerly "developing" Chinese economy is reaching mid-level income levels (nearly 10,000 USD per capita GDP in 2018), with several hundred million Chinese close to European levels of income. Yet it has not become a market economy. It is an even more state-led and politically driven economy, where huge saving rates are captured by state banks for state-owned enterprises. This is capital that fuels growth and subsidizes the industries of the future. Our Chinese sources, as seen by Viviana Zhu, are not blind to the changing perceptions from the outside world. Yet, China remains as a birth right the status of a developing economy under present WTO terms. The asymmetry of rules that this statute provides seems unshakable.

Read Full Text

This article was originally published by Institut Montaigne as part of the first issue of the Asia Program’s quarterly publication, China Trends.

About the Author

François Godement

Former Nonresident Senior Fellow, Asia Program

Godement, an expert on Chinese and East Asian strategic and international affairs, was a nonresident senior fellow in the Asia Program at the Carnegie Endowment for International Peace.

Recent Work

Other
Reorienting China Policy By Working With Europe
- François Godement, Ashley J. Tellis
In The Media
China at the Gates: A New Power Audit of EU-China Relations
- François Godement, Abigaël Vasselier

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Carnegie India does not take institutional positions on public policy issues; the views represented herein are those of the author(s) and do not necessarily reflect the views of Carnegie, its staff, or its trustees.

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