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Misreading China's WTO Record Hurts Global Trade

The United States claims that China routinely violates its World Trade Organization obligations, and that the global body is ineffectual at changing Chinese behavior. But the data do not support such assertions, and the perception that the US narrative has created is hurting the global trading system.

NEW YORK – The 20th anniversary of China’s accession to the World Trade Organization on December 11 has once again highlighted long-standing debates about how well China has lived up to its WTO obligations, and whether any deviation from its commitments boosts or slows its economic growth. This discussion affects many countries’ views on whether the current global trading system should be built up or pulled down.

Former US President Donald Trump was bent on pulling down the WTO, by rendering inoperative its dispute-adjudication system and launching trade wars that the body ruled illegal. And his successor, Joe Biden, has so far done little to improve the WTO’s functioning. The United States claims that China routinely violates its WTO obligations, and that the body is ineffectual at changing Chinese behavior. But the data do not support such assertions, and the misperception that this narrative has created is hurting the global trading system.

To be sure, there are still many distortions in the Chinese economy. For example, China has an industrial policy for shipbuilding that has been in place for a decade and a half. Helped by multiple subsidies for land use, cost of capital, production, and investment totaling about CN¥540 billion ($85 billion), China has gone from being an insignificant player in the industry to becoming the world’s largest exporter of commercial ships.

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