China
China’s developing country status brings it few benefits in the WTO
Authors: Henry Gao, SMU and Weihuan Zhou, UNSW
Whether China is a ‘developing’ or ‘developed’ country for the purposes of the World Trade Organization (WTO) matters a lot to US President Donald Trump. Trump ignited a new front in the US–China trade war in July 2019 by tweeting that the world’s richest nations are masquerading as developing countries to get special treatment. They are ‘cheating’, according to Trump. He directed the US Trade Representative Robert Lighthizer to ‘use all available means to secure changes’ at the WTO.
Then Australia joined in. While in the United States, Australian Prime Minister Scott Morrison referred to China as a ‘newly developed economy’. He backed Trump by saying that, ‘Obviously, as nations progress and develop then the obligations and how the rules apply to them also shift’.
China is digging in. It stands by a statement from its Commerce Ministry spokesman Gao Feng in April 2019 that ‘China’s position on WTO reform has been very clear. China is the largest developing country in the world’.
What’s at stake? In practical terms, almost nothing. Trump and Morrison are demanding something that would give them little.
In the WTO, developing countries are entitled to ‘special and differential treatment’ set out in 155 rules. But none of those rules define a ‘developing country’. Instead, each member is able to ‘self-designate’, subject to challenges from other members.
Being recognised as a developing country was one of the three key principles on which China insisted when negotiating to join the WTO in 2001. It faced resistance. Several members cited ‘the significant size, rapid growth and transitional nature of the Chinese economy’.
In response, the WTO took what it called a ‘pragmatic approach’, meaning that China received hardly any of the special treatment that would normally be accorded to a developing country. For example, under the Uruguay Round of tariff reductions that applied to developing countries already in the WTO, China would have only needed to cut its average industrial tariff from 42.7 per cent to 31.4 per cent. Instead, it agreed to cut it to 9.5 per cent.
Similarly, it agreed to cut its agricultural tariff from 54 per cent to 15.1 per cent, instead of the 37.9 per cent that would have been required had it already been in the WTO. These cuts put its commitments on par with those of developed rather than developing countries.
On some issues, China’s commitments far exceeded those of even developed countries. For example, it agreed to eliminate all export subsidies on agricultural products, an obligation that developed countries were only able to accept 14 years later. It also undertook eliminating all export taxes, which are still allowed under WTO rules and still widely used by many governments. Many of China’s WTO commitments were imposed only on China, or the general rules were modified to either impose heavier obligations on it or confer less rights on it.
Contrary to popular belief, China received hardly any of the benefits that accrue to developing countries when it became a WTO member, besides the ability to use the title ‘developing country’.
After its accession to the WTO, China acted as a member of the developing country group and pushed hard for the group’s interests. In 2003, it joined India and Brazil in pushing developed countries to reform their agricultural trade policies while retaining flexibility for developing countries, a move that is yet to achieve success.
In the meantime, China enjoys little preferential treatment itself, partly because it has eschewed special benefits and partly because most of the transition benefits that were available to it have expired. Some of the provisions available to it are essentially voluntary on the part of the country offering them. Other times, the benefits available to developing countries are not available to developing countries with large export shares. At times, China has also actively forgone important benefits such as by not invoking its right to receive technical assistance under the WTO’s Trade Facilitation Agreement.
On some other issues, China’s sheer size has made it difficult to accommodate the country’s claim to developing country treatment. The negotiation on fisheries subsides, for example, would not be able to move without substantial commitments from China, since it implements one of the largest subsidies in the world.
In its position paper on WTO reform, China says it ‘will never agree to be deprived of its…
China
China’s November 2024 Economy: Navigating Mixed Signals and Ongoing Challenges
In November 2024, China’s economy exhibited mixed results: industrial production rose by 5.4%, while retail sales grew only 3%, below forecasts. Fixed asset investment also faltered. Policymakers are anticipated to introduce measures to stimulate domestic demand and combat deflation.
China’s economy showed mixed performance in November 2024, with industrial production and exports showing resilience, while retail sales and fixed asset investment underperformed, amid ongoing challenges in the property sector. Policymakers are expected to implement targeted fiscal and monetary measures to boost domestic demand and address deflationary pressures.
The National Bureau of Statistics (NBS) has released China’s economy data for November 2024, revealing a mixed performance across key indicators. Retail sales grew by 3 percent year-on-year, a significant slowdown from October’s 4.8 percent growth and well below the 4.6 percent forecast. Industrial production, however, showed resilience, rising by 5.4 percent and exceeding expectations of 5.3 percent growth.
The property sector continued to drag on the broader economy, with real estate investment contracting by 10.4 percent for the January-to-November period, further highlighting the challenges in stabilizing the sector. Fixed asset investment also fell short of expectations, growing by 3.3 percent year-to-date, down from 3.4 percent in October.
In November, China’s industrial value added (IVA) grew by 5.4 percent year-on-year (YoY), slightly accelerating from the 5.3 percent recorded in October. This modest improvement reflects continued recovery in key industries, supported by recent stimulus measures aimed at stabilizing the economy.
The manufacturing sector led the growth, expanding by 6.0 percent YoY, while the power, heat, gas, and water production and supply sector grew by 1.6 percent. The mining industry posted a 4.2 percent YoY increase. Notably, advanced industries outpaced overall growth, with equipment manufacturing and high-tech manufacturing rising by 7.6 percent and 7.8 percent YoY, respectively, underscoring the resilience of China’s innovation-driven sectors.
Key product categories showed robust output gains in November:
From January to November, IVA increased by 5.8 percent YoY, maintaining steady growth over the year despite headwinds from a slowing property market and external uncertainties.
| This article was first published by China Briefing , which is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in in China, Hong Kong, Vietnam, Singapore, and India . Readers may write to info@dezshira.com for more support. |
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China
Ukraine war: 10% of Chinese people are willing to boycott Russian goods over invasion – new study
Since Russia’s 2022 invasion of Ukraine, some Chinese citizens express dissent through potential boycotts of Russian goods, reflecting a complex relationship despite government support for Russia.
Since Russia invaded Ukraine in 2022, the Chinese government has been criticised for its refusal to condemn the war. In 2024, the economic and diplomatic relationship between the two nations appears stronger than ever.
Because of strict censorship and repression imposed by the Chinese Communist Party (CCP), it is difficult to know the extent to which the general public shares their government’s support of Putin’s regime. But a newly published study I carried out with colleagues found that more than 10% of Chinese people surveyed were willing to boycott Russian goods over the war in Ukraine.
This is a surprisingly large figure, especially since existing surveys indicate that Chinese people hold a broadly positive view of their neighbour. We used a representative sample of 3,029 Chinese citizens for this research, to dig into public attitudes to Russia. The survey was done in 2022 after the Ukraine invasion.
We were aware that due to widespread censorship, our participants might not be willing to give honest answers to questions about Russia’s actions in Ukraine. They might also not feel safe to do that in a regime where disagreement with the CCP’s position is often met with harsh punishment. This is why we asked them to tell us if they would be willing to boycott Russian products currently sold in China.
We felt this question was a good indicator of how much the participants disapproved of Russian foreign policy in Ukraine. More importantly, we were also curious to find out whether Chinese citizens would be willing to take direct political action to punish Russia economically for its aggressive behaviour.
In our study, we split respondents into the three different ideological groups in China: “liberals”, who support the free market and oppose authoritarianism; “the new left”, who sympathise with the policies pursued in China under Mao Zedong; and “neo-authoritarians”, who believe the Russian-Ukrainian conflict is an extension of the rivalry between authoritarian China and the liberal United States. These groups were based on the main political beliefs in China.
We found that liberals were most likely to say they were willing to boycott Russian products. Liberals believe that China should work with, rather than against, western democracies. They also place a high value on human rights and democratic freedoms. Because of their beliefs, they are likely to think that Russia’s actions against Ukraine were unprovoked, aggressive and disproportional.
Chinese and Russian economic and diplomatic relations seem closer than ever in 2024.
American Photo Archive/Alamy
The new left and neo-authoritarians we surveyed were more supportive of Russian products. The new left see Russia as a close ally and believe that Nato’s expansion in eastern Europe was a form of aggression. Neo-authoritarians, on the other hand, believe that supporting Russia, an allied autocracy, is in China’s best interest.
Boycotting Russian goods
Asking Chinese participants if they are willing to boycott Russian products might seem like a simple matter of consumer preferences. However, our study reveals a great deal about the way in which regular citizens can express controversial political beliefs in a repressive authoritarian regime.
Boycotting products of certain companies has long been studied in the west as a form of unconventional political action that helps people express their beliefs. However, in the west, boycotting certain products is simply one of many ways people are able to take political action. In a country such as China, boycotting a Russian product might often be the only safe way to express disagreement with the country’s actions.
This is because citizens do not have to tell others they chose not to buy a product, and their actions are unlikely to attract the attention of the authorities.
Since Russian goods are readily available to Chinese consumers and China is encouraging more Russian exports to reach its market, the Russian economy could be significantly affected by an organised boycott campaign in China. The considerable level of support for a boycott expressed by some of our participants, as well as previous acts of solidarity with Ukraine in China, suggest that such a campaign could already be taking place in the country.
This could harm Russia because it regularly exports a number of different products such as meat, chocolate, tea and wine to China. These goods made up 5.1% of China’s total imports in 2023 – and this figure is likely to increase if Russia becomes more isolated from the west, and therefore more dependent on China for its trade.
While 5.1% of the Chinese market might seem like a low figure, China is home to over 1.4 billion people. In this context, even a small boycott could result in a serious loss to Russian companies.
Our research shows that Chinese citizens don’t always support the official position of the communist party. It also shows that many people there will express even the most unpopular political opinions – if they can find a safe way to do it.
This article is republished from The Conversation under a Creative Commons license. Read the original article.
China
Australia Can Enhance China’s Credibility in the CPTPP
In early 2024, China sought to join the CPTPP, potentially offering modest economic benefits to Australia. Key reforms include limiting state-owned enterprise subsidies, enhancing data flows, and banning forced labor.
China’s Interest in the CPTPP
In early 2024, China expressed a keen interest in joining the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), a trade agreement involving eleven Pacific Rim economies and the United Kingdom. This move is anticipated to yield modest economic benefits for Australia. However, it also opens the door for vital reforms in areas such as the control of subsidies for state-owned enterprises, allowing free cross-border data flows, and prohibiting forced labor practices.
Economic Implications for Australia
A May 2024 report from the Australian Productivity Commission indicated that China’s accession to the CPTPP might raise Australia’s GDP by only 0.01%. This modest gain isn’t surprising, given Australia’s existing preferential trade arrangement with China through the Regional Comprehensive Economic Partnership. Nonetheless, the CPTPP encompasses more than just tariff reductions, focusing on broader trade principles and standards.
Reform Commitments Required from China
For China to become a CPTPP member, it must demonstrate adherence to high-standard rules initially developed with the country in mind. This commitment will help alleviate concerns among member nations like Japan and Canada, particularly regarding China’s economic practices and geopolitical tensions, such as those with Taiwan. Membership would necessitate reforms, including limiting SOE subsidies, enabling freer data flows, and banning forced labor, with significant penalties for non-compliance.
Source : Australia can encourage China’s credibility in the CPTPP
- China’s November 2024 Economy: Navigating Mixed Signals and Ongoing Challenges
- Ukraine war: 10% of Chinese people are willing to boycott Russian goods over invasion – new study
- Australia Can Enhance China’s Credibility in the CPTPP
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