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China's Changing Perspective on the WTO: From Aspiration, Assimilation to Alienation

Published online by Cambridge University Press:  12 April 2022

Henry Gao*
Affiliation:
Singapore Management University, Singapore

Abstract

Since its accession to the WTO twenty years ago, China's image has shifted from a good student aspiring to assimilate itself into the multilateral trading system to one that is increasingly alienated from key WTO principles. How has China's perspective on WTO been evolving? What are the reasons behind China's changing perspective? This paper answers these questions from the Chinese perspective with a comprehensive analysis of the key moments in China's first two decades in the WTO, followed by practical suggestions on how to engage China more constructively in the WTO and beyond.

Type
Original Article
Copyright
Copyright © The Author(s), 2022. Published by Cambridge University Press

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Footnotes

This research has been supported by the National Research Foundation, Singapore under its Emerging Areas Research Projects (EARP) Funding Initiative. Any opinions, findings, and conclusions or recommendations expressed in this material are those of the author(s) and do not reflect the views of the National Research Foundation, Singapore.

References

1 See e.g., P.C. Mavroidis and André Sapir, ‘The WTO at the Crossroads: How to Avoid the China Syndrome’, World Trade Review, doi:10.1017/S147474562200009X

2 See e.g., M. Wu (2016) ‘The “China, Inc” Challenge to Global Trade Governance’, Harvard International Law Journal 57(2); J. Hillman (2018) Hearing on US Tools to Address Chinese Market Distortion; P.C. Mavroidis and A. Sapir (2021) China and WTO: Why Multilateralism Still Matters; R.L. Howse, ‘Official Business: International Trade Law and the Resurgence (or Resilience) of the State as an Economic Actor’, University of Pennsylvania Journal of International Law (forthcoming); W. Zhou, H. Gao, and X. Bai (2019) ‘Building a Market Economy Through WTO-Inspired Reform of State-owned Enterprises in China’, International and Comparative Law Quarterly 68, 977.

3 For a detailed discussion of China's history with the GATT and WTO, see H. Gao (2007) ‘China's Participation in the WTO: A Lawyer's Perspective’, Singapore Year Book of International Law 11, 41–74.

4 Chinese Ministry of Foreign Trade and Ministry of Foreign Affairs, ‘Report on the “GATT” Issue [Guanyu “Guanshui ji Maoyi Zongxieding”, Wenti de Qingshi]’, 30 November 1971, as quoted in G. Shi (2011) Reader on China's Accession to the World Trade Organization (Four): Negotiation History of China's Accession to the World Trade Organization [Zhongguo Jiaru Shijie Maoyi Zuzhi Zhishi Duben (Si): Zhongguo Jiaru Shijie Maoyi Zuzhi Tanpan Licheng], People's Publishing House [Renmin Chubanshe], at 19–21.

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6 Ibid., at 24.

7 Ibid.

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17 Ibid., at 450.

18 Ibid.

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20 Jiang, supra note 16, at 450.

21 Ibid., at 450–451.

22 Ibid., at 451.

23 Ibid., at 451–453.

24 Ibid., at 458.

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28 Sun, supra, note 25, at 97.

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42 WTO Dispute Settlement Body, Minutes of Meeting, Held in the Centre William Rappard on 22 February 2012, WT/DSB/M/312, 22 May 2012.

43 Z. Li (2011) ‘Appeal to WTO to Refrain from Treating China as Second Class Citizen [Jihu WTO Moba Zhongguo ru Lingce]’, China WTO Tribune 9, at 94.

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45 Joint Declaration on the Launch of Negotiations for the Regional Comprehensive Economic Partnership, https://asean.org/wp-content/uploads/2016/10/SEOM-AFPs-Bali-Annex-4-Joint-Declaration-on-the-Launch-of-Negotiations-for-the-RCEP.pdf.

46 First suggested by President Xi Jinping in a speech titled ‘Promote People-to-People Friendship and Create a Better Future’ at Kazakhstan's Nazarbayev University on 7 September 2013. See ‘President Xi Jinping Delivers Important Speech and Proposes to Build a Silk Road Economic Belt with Central Asian Countries’, 7 September 2013, https://www.mfa.gov.cn/ce/cegy//eng/zgyw/t1076334.htm (last visited 1 June 2020).

47 First proposed by President Xi in his speech to the People's Representative Council of Indonesia on 2 October 2013. See W. Jiao (2013) ‘President Xi gives speech to Indonesia's parliament’, China Daily, 2 October 2013, www.chinadaily.com.cn/china/2013xiapec/2013-10/02/content_17007915_2.htm (last visited 1 June 2020).

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49 Ibid. For a detailed review of the Belt and Road Initiative, see G. Shaffer and H. Gao (2020) ‘A New Chinese Economic Order?’, Journal of International Economic Law 22, 614–620.

50 Xi J., ‘Coordinate Two Grand Schemes and Lay a Solid Foundation for the Path of Peaceful Development [Tongchou Liangge Daju, Hangshi zou Heping Fazhan Daolu de Jichu]’, speech at the third joint study session of the 18th Politiburo of the China Communist Party, 28 January 2013, www.gov.cn/ldhd/2013-01/29/content_2321822.htm (accessed 22 January 2022).

51 Presidential Memorandum for the United States Trade Representative, 14 August 2017, www.whitehouse.gov/presidential-actions/presidential-memorandum-united-states-trade-representative (last visited 1 June 2020).

52 United States Trade Representative (USTR) (2018) ‘Findings of the Investigation into China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation Under Section 301 of the Trade Act of 1974’, 22 March 2018, https://ustr.gov/sites/default/files/Section%20301%20FINAL.PDF (last visited 23 January 2022).

53 ‘Presidential Memorandum on the Actions by the United States Related to the Section 301 Investigation – the White House’, https://trumpwhitehouse.archives.gov/presidential-actions/presidential-memorandum-actions-united-states-related-section-301-investigation/ (accessed 23 January 2022).

54 USTR (2018) ‘Under Section 301 Action, USTR Releases Proposed Tariff List on Chinese Products’, 3 April 2018 https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/april/under-section-301-action-ustr (last visited January 23, 2022).

55 Panel Report, United States – Sections 301-310 of the Trade Act of 1974, WT/DS152/R, adopted 27 January 2000, DSR 2000:II, p. 815, para. 7.95–7.97.

56 United States – Tariff Measures on Certain Goods from China, DS543.

57 US – Tariff Measures on Certain Goods from China II, DS565; US – Tariff Measures on Certain Goods from China III, DS587.

58 USTR (2017) ‘Joint Statement by the United States, European Union and Japan at MC11’, 12 December 2017, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2017/december/joint-statement-united-states (last visited January 23, 2022).

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60 B. O'Connor (2011) ‘Is China a market economy?’, https://voxeu.org/article/china-market-economy (accessed 3 November 2021).

61 ‘Texts Adopted – China's Market Economy Status – Thursday, 12 May. 2016’, www.europarl.europa.eu/doceo/document/TA-8-2016-0223_EN.html (accessed 22 January 2022).

62 US Department of Commerce (2017) ‘Memorandum on China's Status as a Non-Market Economy Country, 1, 9, A-570-053, 26 October 2017.

63 ‘China's Market Economy Status’ – European Parliament Resolution of 12 May 2016 on China's market economy status, 2016/2677/RSP, European Parliament, www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//NONSGML±TA±P8-TA-2016-0223±0±DOC±PDF±V0//EN.

64 ‘China files WTO complaint against US, EU over price comparison methodologies’ (2016), www.wto.org/english/news_e/news16_e/ds515_516rfc_12dec16_e.htm (visited 15 January 2022). The two cases are United States – Measures Related to Price Comparison Methodologies, (DS515 and European Union – Measures Related to Price Comparison Methodologies, DS516.

65 H. Gao (2018) ‘Broken Promises Set a Bad Example for China in the WTO’, East Asia Forum, 9 March 2018, www.eastasiaforum.org/2018/03/09/broken-promises-set-a-bad-example-for-china-in-the-wto/ (accessed 17 March 2022).

66 ‘Opening Statement by Ambassador Zhang Xiangchen as a Part of the Oral Statement of China at the First Substantive Meeting of the Panel in the Dispute: European Union – Measures Related to Price Comparison Methodologies (DS516)’, at para 2, http://wto.mofcom.gov.cn/article/newsupdates/201712/20171202684583.shtml (accessed 22 January 2022).

67 Ibid., at para. 16.

68 H. Gao and W. Zhou, ‘The End of the WTO and the Last Case?’, East Asia Forum, 10 July 2019, www.eastasiaforum.org/2019/07/10/the-end-of-the-wto-and-the-last-case/ (accessed 22 January 2022). See also the comment by GeraldoR on 3 July 2019, Jesse Kreier, ‘China NME Case Suspended (International Economic Law and Policy Blog, https://ielp.worldtradelaw.net/2019/06/china-nme-case-suspended.html (accessed 17 March 2022).

69 Communication from the Panel, European Union – Measures Related to Price Comparison Methodologies, WT/DS516/3, 17/06/2019.

70 European Union – Measures Related to Price Comparison Methodologies – Lapse of authority for the establishment of the Panel – Note by the Secretariat, WT/DS516/14,.

71 ‘MOFCOM Responds to the Termination of the Litigation Process on the Case against the EU's “Surrogate Country” Approach in Anti-dumping [Shangwubu Huiying Zhongzhi su Oumeng Fanqingxiao “Tidaiguo” Shimao Zhengduanan Susong Chengxu]’, 11 July 2020, www.thepaper.cn/newsDetail_forward_8230020 (accessed 7 November 2021).

72 See European Commission, ‘WTO Modernisation: Introduction to Future EU Proposals’, 18 September 2018), at pp. 4–6; ‘Communication from Canada, Strengthening and Modernizing the WTO: Discussion Paper’, WTO Doc. JOB/GC/201 at 1, 24 September, 2018, at p. 5.

73 Appellate Body Report, US – Anti-Dumping and Countervailing Duties (China), WT/DS379/AB/R, adopted 25 March 2011, paras. 276 to 359.

74 See China – Intellectual Property Rights II, Request for consultations by the United States, WT/DS542/1, IP/D/38 (26 March 2018); China – Certain Measures on the Transfer of Technology, Request for consultations by the European Union, WT/DS549/1, G/L/1244, IP/D/39 (6 June 2018).

75 Appellate Body Report, China – Publications and Audiovisual Products, WT/DS363/AB/R, adopted 19 January 2010, paras. 338 to 413; see also the potential WTO case when Google pulled out of China, which was discussed in H. Gao (2011) ‘Google's China Problem: A Case Study on Trade, Technology and Human Rights Under the GATS’, Asian Journal of WTO and International Health Law and Policy 6, 347. For an overview of China's data regulation framework, see H. Gao (2021), ‘Data Regulation with Chinese Characteristics’, in M. Burri (ed.), Big Data and Global Trade Law. Cambridge: Cambridge University Press, 245–267.

76 See EU proposal, supra note 72, at 9–11; Canada proposal, supra note 72, at 2.

77 USTR (2002) ‘2002 Report to Congress on China's WTO Compliance’ (1 December 2002), https://china.usc.edu/sites/default/files/article/attachments/2002-report-chinas-wto-compliance.pdf (last visited 1 June 2020), at 22–23.

78 USTR (2018) ‘2018 Report to Congress on China's WTO Compliance’ (February 2019), https://ustr.gov/sites/default/files/2018-USTR-Report-to-Congress-on-China%27s-WTO-Compliance.pdf (last visited 1 June 2020), at 75.

79 Ibid.

80 Ibid. at 76.

81 General Council and Council for Trade in Goods, ‘Procedures to Enhance Transparency and Strengthen Notification Requirements under WTO Agreements – Communication from Argentina, Australia, Canada, Costa Rica, the European Union, Israel, Japan, New Zealand, the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu, and the United States – Revision’, JOB/GC/204/Rev.3, JOB/CTG/14/Rev.3 (5 March 2020), at 3–4.

82 EU Proposal, supra note 72, at 6.

83 Ibid. at 7.

84 Canada Proposal, supra note 72, at 5.

85 United States, ‘Draft General Council Decision – Procedures to strengthen the negotiating function of the WTO – Decision of X Date’, WT/GC/W/764, 15 February 2019, at 1–2.

86 ‘On the Reform of the WTO’, Intervention by H.E. Ambassador Zhang Xiangchen at the Luncheon in Paris Workshop’, 2018, http://wto.mofcom.gov.cn/article/meetingsandstatements/201811/20181102808197.shtml (accessed 22 January 2022).

87 USTR (2020) ‘Introduction’, Report on the Appellate Body of the World Trade Organization, February 2020, https://ustr.gov/sites/default/files/Report_on_the_Appellate_Body_of_the_World_Trade_Organization.pdf.

88 For a discussion on the merits of the US complaints, see H. Gao (2019), ‘Disruptive Construction or Constructive Destruction? Reflections on the Appellate Body Crisis’, in Chang-fa Lo, Junji Nakagawa, and Tsai-yu Lin (eds.), The Appellate Body of the WTO and Its Reform, Springer, at 215–238.

89 USTR, supra note 87, at pp. 85–89.

90 USTR, supra note 87, at pp. 105–109.

91 USTR, supra note 87, at pp. 116–119.

92 H. Gao ‘Broken Promises Set a Bad Example for China in the WTO’, East Asia Forum, 9 March 2018, www.eastasiaforum.org/2018/03/09/broken-promises-set-a-bad-example-for-china-in-the-wto/ (accessed 22 January 2022).

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95 L. Li(2018) ‘Voluntarily Expand Imports to Enrich Consumer's Choices [Zhudong Kuoda Jinkou, Fengfu Xiaofei Xuanze]’, People's Daily, 2 June 2018, 2.

96 Ibid.

97 H. Qiu (2021) ‘2021 Version of the Negative List on Foreign Investment Further Reduced [2021 Nian Ban Waizi Zhunru Fumian Qingdan zai Suojian]’, People's Daily, 28 December 2021, http://finance.people.com.cn/n1/2021/1228/c1004-32318379.html (accessed 23 January 2022).

98 ‘SCIO Briefing on the Progress of Hainan Free Trade Port Policies and Institution’, 2021, http://english.scio.gov.cn/pressroom/node_8023584.htm (accessed 23 January 2022).

99 For discussion on the CAI, see H.S. Gao (2021) ‘The EU–China Comprehensive Agreement on Investment: Strategic Opportunity Meets Strategic Autonomy’, 1 May 2021, https://ssrn.com/abstract=3843434 or http://dx.doi.org/10.2139/ssrn.3843434.

100 ‘Full Text of Xi Jinping's Report at 19th CPC National Congress’, 2017, www.chinadaily.com.cn/china/19thcpcnationalcongress/2017-11/04/content_34115212.htm (accessed 23 January 2022).

101 X. Yi (2021) ‘China and WTO Reform [Zhongguo He WTO Gaige]’, 28 October 2021, www.ccg.org.cn/archives/66333 (accessed 23 January 2022).

102 ‘Investment Facilitation for Development’, https://perma.cc/8LKD-LPCV.

103 Joint Ministerial Statement on Investment, Facilitation for Development, WT/MIN(17)/59, 13 December 2017.

104 H. Gao (2021) ‘Across the Great Wall: E-Commerce Joint Statement Initiative Negotiation and China’, in Shin-yi Peng, Ching-Fu Lin, and T. Streinz (eds.), Artificial Intelligence and International Economic Law: Disruption, Regulation, and Reconfiguration. Cambridge University Press.

105 H. Gao (2021) supra note 75.

106 ‘WTO, World Economic Forum and eWTP Launch Joint Public–Private Dialogue to Open up E-commerce for Small Business’, WTO, 11 December 2017, https://perma.cc/W97H-SQ5F.

107 B. Baschuk and S. Donnan, ‘China to Join Talks on $25 Trillion E-Commerce Market at Last Minute’, Bloomberg, 25 January 2019, https://perma.cc/273Y-EEHK.

108 Ling X., ‘WTO Members Sign Joint Statement on E-Commerce at Davos [Shimao Zuzhi Chengyuan zai Dawosi Qianshu Dianzi Shangwu Lianhe Shengming]’, www.gov.cn/xinwen/2019-01/25/content_5361275.htm (accessed 23 January 2022).

109 H. Gao (2018) ‘Digital or Trade? The Contrasting Approaches of China and US to Digital Trade’, Journal of International Economic Law 21(2), 297–321, https://doi.org/10.1093/jiel/jgy015.

110 MOFCOM (2018) ‘China's Position Paper on WTO Reform’, 20 December 2018, www.mofcom.gov.cn/article/jiguanzx/201812/20181202817611.shtml (accessed 23 January 2022).

111 WTO, General Council, ‘China's Proposal on WTO Reform: Communication from China’, WT/GC/W/773 (13 May 2019).

112 Ibid., at 3–5.

113 MOFCOM (2020) ‘China, EU and Other WTO Members Decide to Establish Multi-Party Interim Appeal Arbitration Arrangement [Zhongguo Yu Oumeng Deng Shimao Zuzhi Chengyuan Jueding Jianli Duofang Linshi Shangsu Zhongcai Anpai]’, 27 March 2020, www.mofcom.gov.cn/article/ae/ai/202003/20200302949253.shtml (accessed 23 January 2022).

114 X. Xia (2020) ‘US Obstructing Establishment of Interim Appeal Arbitration Mechanism at the WTO, China's Ministry of Commerce Refutes: US Actions Lacking Basis under WTO Rules [Meiguo Zunao WTO Chengli Linshi Shangsu Zhongcai Jizhi, Shangwubu Bochi: Meifang Xingwei Quefa Shimao Guize Yiju]’, 21st Century Business Herald, 18 June 2020, https://m.21jingji.com/article/20200618/herald/015b28132bad9647b86d74b19e28a604_zaker.html (accessed 23 January 2022).

115 For a criticism of the MPIA, see H. Gao (2021) ‘Finding a Rule-Based Solution to the Appellate Body Crisis: Looking Beyond the Multiparty Interim Appeal Arbitration Arrangement’, Journal of International Economic Law 24(3), 534–550, https://doi.org/10.1093/jiel/jgab031.

116 MOFCOM (2018) ‘Notice on the Collection of Additional Tariff on Some Imported Products from the United States [Guanyu dui Yuanchanyu Meiguo de Bufen Jinkou Shangpin Jiazheng Guanshui de Gonggao]’, ShangwubuGonggao No. 34, 4 April 2018, www.mofcom.gov.cn/article/b/e/201804/20180402728516.shtml (accessed 23 January 2022).

117 D. Wong and A. Chipman Koty (2020) ‘The US–China Trade War: A Timeline’, China Briefing News, 25 August 2020, www.china-briefing.com/news/the-us-china-trade-war-a-timeline/ (accessed 23 January 2022). For a detailed analysis of the different phases of trade war, see C.P. Bown, ‘US–China Trade War: The Guns of August’, www.piie.com/blogs/trade-and-investment-policy-watch/us-china-trade-war-guns-august (accessed 23 January 2022).

118 According to the US government, US import from China in 2018 was only $540 billion with its export to China $120 billion. See United Sates Census Bureau Foreign Trade Division, ‘Foreign Trade Data: Trade in Goods with China’, www.census.gov/foreign-trade/balance/c5700.html (accessed 23 January 2022).

119 MOFCOM, supra note 116.

120 G. Yang (2018) ‘International Law behind the Trade War between US and China [Zhongmei Maoyizhan Zhong de Guojifa]’, International Law Review of Wuhan University [Wuda Guojifa Pinglun], 120, at 135–138, http://ilr.whu.edu.cn/d/file/zxqk/dqml/2018-11-12/75156e95c2e263ec08cb89708dca031c.pdf (last visited 23 January 2022).

121 USTR, ‘Economic and Trade Agreement between the Government of the United States of America and the Government of the People's Republic Of China’, 15 January 2020, https://ustr.gov/countries-regions/china-mongolia-taiwan/peoples-republicchina/phase-one-trade-agreement/text (last visited 1 June 2020). For a detailed analysis of the phase 1 deal, see W. Zhou and H. Gao, ‘US–China Phase One Deal: A Brief Account – Regulating for Globalization’, January 2020, http://regulatingforglobalization.com/2020/01/22/us-china-phase-one-deal-a-brief-account/ (accessed 7 November 2021).

122 Ibid., Art. 6.2.

123 Ibid., Art. 11.1(b).

124 S. Lester (2021), ‘At WTO General Council Meeting, US and Other WTO Members Push for Taiwanese Chair of GPA Committee’, October 2021, www.chinatrademonitor.com/wto-general-council-us-others-push-taiwanese-chair/ (accessed 7 November 2021).

125 J. Pauwelyn (2019) ‘WTO Dispute Settlement Post 2019: What to Expect?’, Journal of International Economic Law 22(3), 297–321, https://doi.org/10.1093/jiel/jgz024.

126 MOFCOM, supra note 110.

127 WTO, supra note 111, Section 2.4.2.

128 ‘On the Reform of the WTO Intervention by H.E. Ambassador Zhang Xiangchen at the Luncheon in Paris Workshop’, 20 November 2018, http://wto.mofcom.gov.cn/article/meetingsandstatements/201811/20181102808197.shtml (accessed 23 January 2022).

129 ‘Statement by H.E. Ambassador Dr ZHANG Xiangchen at the WTO General Council Meeting’, 2018, http://wto.mofcom.gov.cn/article/meetingsandstatements/201807/20180702770676.shtml (accessed 7 November 2021); ‘Statement by H.E. Ambassador Zhang Xiangchen of China at the General Council Meeting (Item 6 and 7) 13 October 2020’, http://wto.mofcom.gov.cn/article/meetingsandstatements/202010/20201003007644.shtml (accessed 7 November 2021).

130 B. Davis and Y. Hayashi, ‘New Trade Representative Says US Isn't Ready to Lift China Tariffs –WSJ’ https://www.wsj.com/articles/new-trade-representative-says-u-s-isnt-ready-to-lift-china-tariffs-11616929200 (accessed 23 January 2022).

131 W. Zhou and D. Peng (2018) ‘EU – Price Comparison Methodologies (DS516): Challenging the Non- Market Economy Methodology in Light of the Negotiating History of Article 15 of China's WTO Accession Protocol’, UNSW Law Research Paper No. 18-3, Journal of World Trade 52(3), https://ssrn.com/abstract=3115861 or http://dx.doi.org/10.2139/ssrn.3115861.

132 H. Gao, ‘Rethinking China Trade Policy: Lessons Learned and Options Ahead’, National Foundation for American Policy 2021, https://nfap.com/wp-content/uploads/2021/01/Rethinking-China-Trade-Policy.NFAP-Policy-Brief.January-2021-2.pdf.

133 ‘China Has Entirely Fulfilled Its WTO Commitments: Ministry’, www.news.cn/english/2021-10/28/c_1310275388.htm (accessed 23 January 2022).

134 H. Gao supra note 65.