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China

China’s developing country status brings it few benefits in the WTO

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A CRH (China Railway High-speed) bullet train leaves the Beijing West railway station at night in Beijing, China, 8 July 2019 (Photo: Reuters/Liu Jiaye).

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…

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Business

China Limits Apple Operations as BYD Manufacturing Moves to India and Southeast Asia Amid Trade Frictions | International Business News – The Times of India

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China is restricting the export of high-tech manufacturing equipment and personnel to India and Southeast Asia, aiming to maintain domestic production amid potential US tariffs, impacting companies like Foxconn and BYD.


China Curbs on High-Tech Manufacturing

China is intensifying restrictions on the movement of employees and specialized equipment essential for high-tech manufacturing in India and Southeast Asia. This measure aims to prevent companies from relocating production due to potential tariffs under the incoming US administration. Beijing has urged local governments to restrict technology transfers and export of manufacturing tools as part of this strategy.

Impact on Foxconn and Apple’s Strategy

Foxconn, Apple’s primary assembly partner, is facing challenges in sending staff and receiving equipment in India, which could impact production. Despite these hurdles, current manufacturing operations remain unaffected. The Chinese government insists it treats all nations equally while reinforcing its domestic production to mitigate job losses and retain foreign investments.

Broader Implications for India

Additionally, these restrictions affect electric vehicle and solar panel manufacturers in India, notably BYD and Waaree Energies. Although the measures are not explicitly targeting India, they complicate the business landscape. As foreign companies seek alternatives to China, these developments are likely to reshape manufacturing strategies amidst ongoing geopolitical tensions.

Source : China Restricts Apple, BYD Manufacturing Shifts to India & Southeast Asia Amid Trade Tensions | International Business News – The Times of India

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China

China’s GDP Grows 5% in 2024: Key Insights and Main Factors

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In 2024, China’s GDP grew by 5.0%, meeting its annual target. The fourth quarter saw a 5.4% increase, driven by exports and stimulus measures. The secondary industry grew 5.3%, while the tertiary increased by 5.0%, totaling RMB 134.91 trillion.


China’s GDP grew by 5.0 percent in in 2024, meeting the government’s annual economic target set at the beginning of the year. Fourth-quarter GDP exceeded expectations, rising by 5.4 percent, driven by exports and a flurry of stimulus measures. This article provides a brief overview of the key statistics and the main drivers behind this growth.

According to official data released by the National Bureau of Statistics (NBS) on January 17, 2025, China’s GDP reached RMB 134.91 trillion (US$18.80 trillion) in 2024, reflecting a 5.0 percent year-on-year growth at constant prices. During the 2024 Two Sessions, the government set the 2024 GDP growth target of “around 5 percent”.

By sector, the secondary industry expanded by 5.3 percent year-on-year to RMB 49.21 trillion (US$6.85 trillion), the fastest among the three sectors, while the tertiary industry grew by 5.0 percent, reaching RMB 76.56 trillion (US$10.63 trillion) and the primary industry contributed RMB 9.14 trillion (US$1.31 trillion), growing 3.5 percent.

A more detailed analysis of China’s economic performance in 2024 will be provided later.

(1USD = 7.1785 RMB)

 


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 ChinaHong KongVietnamSingapore, and India . Readers may write to info@dezshira.com for more support.

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China

Can science be both open and secure? Nations grapple with tightening research security as China’s dominance grows

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The U.S.-China science agreement renewal narrows collaboration scopes amid security concerns, highlighting tensions. Nations fear espionage, hindering vital international partnerships essential for scientific progress. Openness risks declining.

Amid heightened tensions between the United States and China, the two countries signed a bilateral science and technology agreement on Dec. 13, 2024. The event was billed as a “renewal” of a 45-year-old pact to encourage cooperation, but that may be misleading.

The revised agreement drastically narrows the scope of the original agreement, limits the topics allowed to be jointly studied, closes opportunities for collaboration and inserts a new dispute resolution mechanism.

This shift is in line with growing global concern about research security. Governments are worried about international rivals gaining military or trade advantages or security secrets via cross-border scientific collaborations.

The European Union, Canada, Japan and the United States unveiled sweeping new measures within months of each other to protect sensitive research from foreign interference. But there’s a catch: Too much security could strangle the international collaboration that drives scientific progress.

As a policy analyst and public affairs professor, I research international collaboration in science and technology and its implications for public and foreign policy. I have tracked the increasingly close relationship in science and technology between the U.S. and China. The relationship evolved from one of knowledge transfer to genuine collaboration and competition.

Now, as security provisions change this formerly open relationship, a crucial question emerges: Can nations tighten research security without undermining the very openness that makes science work?

Chinese Premier Deng Xiaoping and American President Jimmy Carter sign the original agreement on cooperation in science and technology in 1979.
Dirck Halstead/Hulton Archive via Getty Images

China’s ascent changes the global landscape

China’s rise in scientific publishing marks a dramatic shift in global research. In 1980, Chinese authors produced less than 2% of research articles included in the Web of Science, a curated database of scholarly output. By my count, they claimed 25% of Web of Science articles by 2023, overtaking the United States and ending its 75-year reign at the top, which had begun in 1948 when it surpassed the United Kingdom.

In 1980, China had no patented inventions. By 2022, Chinese companies led in U.S. patents issued to foreign companies, receiving 40,000 patents compared with fewer than 2,000 for U.K. companies. In the many advanced fields of science and technology, China is at the world frontier, if not in the lead.

Since 2013, China has been the top collaborator in science with the United States. Thousands of Chinese students and scholars have conducted joint research with U.S. counterparts.

Most American policymakers who championed the signing of the 1979 bilateral agreement thought science would liberalize China. Instead, China has used technology to shore up autocratic controls and to build a strong military with an eye toward regional power and global influence.

Leadership in science and technology wins wars and builds successful economies. China’s growing strength, backed by a state-controlled government, is shifting global power. Unlike open societies where research is public and shared, China often keeps its researchers’ work secret while also taking Western technology through hacking, forced technology transfers and industrial espionage. These practices are why many governments are now implementing strict security measures.

Nations respond

The FBI claims China has stolen sensitive technologies and research data to build up its defense capabilities. The China Initiative under the Trump administration sought to root out thieves and spies. The Biden administration did not let up the pressure. The 2022 Chips and Science Act requires the National Science Foundation to establish SECURE – a center to aid universities and small businesses in helping the research community make security-informed decisions. I am working with SECURE to evaluate the effectiveness of its mission.

Other advanced nations are on alert, too. The European Union is advising member states to boost security measures. Japan joined the United States in unveiling sweeping new measures to protect sensitive research from foreign interference and exploitation. European nations increasingly talk about technological sovereignty as a way to protect against exploitation by China. Similarly, Asian nations are wary of China’s intentions when it seeks to cooperate.

Australia has been especially vocal about the threat posed by China’s rise, but others, too, have issued warnings. The Netherlands issued a policy for secure international collaboration. Sweden raised the alarm after a study showed how spies had exploited its universities.

Canada has created the Research Security Centre for public safety and, like the U.S., has established regionally dispersed advisers to provide direct support to universities and researchers. Canada now requires mandatory risk assessment for research partnerships involving sensitive technologies. Similar approaches are underway in Australia and the U.K.

Germany’s 2023 provisions establish compliance units and ethics committees to oversee security-relevant research. They are tasked with advising researchers, mediating disputes and evaluating the ethical and security implications of research projects. The committees emphasize implementing safeguards, controlling access to sensitive data and assessing potential misuse.

Japan’s 2021 policy requires researchers to disclose and regularly update information regarding their affiliations, funding sources – both domestic and international – and potential conflicts of interest. A cross-ministerial R&D management system is unrolling seminars and briefings to educate researchers and institutions on emerging risks and best practices for maintaining research security.

The Organisation for Economic Co-operation and Development keeps a running database with more than 206 research security policy statements issued since 2022.

Emmanuelle Charpentier, left, from France, and Jennifer Doudna, from the U.S., shared the Nobel Prize in chemistry in 2020 for their joint research.
Miguel RiopaI/AFP via Getty Images

Openness waning

Emphasis on security can strangle the international collaboration that drives scientific progress. As much as 25% of all U.S. scientific articles result from international collaboration. Evidence shows that international engagement and openness produce higher-impact research. The most elite scientists work across national borders.

Even more critically, science depends on the free flow of ideas and talent across borders. After the Cold War, scientific advancement accelerated as borders opened. While national research output remained flat in recent years, international collaborations showed significant growth, revealing science’s increasingly global nature.

The challenge for research institutions will be implementing these new requirements without creating a climate of suspicion or isolation. Retrenchment to national borders could slow progress. Some degree of risk is inherent in scientific openness, but we may be coming to the end of a global, collaborative era in science.

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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