The US government on Wednesday (July 17) condemned the Chinese authorities for operating its non-market economy in a “predatory” manner, causing harm to workers and businesses in the United States and other countries. The US also pointed out that China presents a fundamental challenge to the world trading system and continues to escalate its actions.
During the China trade policy review meeting held at the World Trade Organization (WTO) on Wednesday, David Bisbee, Deputy US Permanent Representative to the WTO, stated that “China is not the only WTO member still operating a non-market economy, but the difference between China and others is that Beijing operates its non-market economy in a ‘predatory’ manner.”
Bisbee mentioned that when China joined the WTO in 2001, WTO members hoped that the “China Accession” bilateral agreement signed between China and the US would help change the Chinese authorities’ policies and practices incompatible with the international trading system. However, more than two decades have passed, and those expectations have not been met, and China (the Chinese Communist Party) has shown no intention of changing.
The terms of the bilateral agreement were based on open and market-oriented policies, with the hope of guiding Beijing to accept market-oriented principles.
Bisbee stated, “On the contrary, China (the Chinese Communist Party) has doubled down on its state-led non-market economy, causing harm to workers and businesses in the United States and other countries (including emerging and developing economies).”
Due to China’s massive economy and trade volume, it can utilize its state-led economic approach to eliminate foreign competition and accumulate market power. The Chinese authorities’ state-led economic policies often result in overcapacity and oversupply, leading to the dumping of cheap products in other countries, posing a threat termed by economists as “China Shock 2.0” to the US and other countries.
The US representative condemned China for using “all means” of the state to support achieving global market dominance in key industries, stating that “foreign companies are not competing with individual Chinese companies but with the Chinese state and Chinese companies together.”
Through these non-market policies and actions, Chinese companies, under the direction of the Chinese authorities, manufacture excessive products and sell them at unreasonable low prices or below cost, especially in export markets. Bisbee pointed out that this harm is particularly significant for emerging and developing economies, preventing their development and making them heavily reliant on China.
While the US continues to urge the Chinese government to make changes during the meeting, Bisbee expressed skepticism about any changes, stating that “China (the Chinese Communist Party) remains the biggest challenge to the international trading system.”
The WTO’s evaluation report is part of the China trade policy review. The WTO conducts reviews of the trade policies of its 166 member countries every few years, inviting other countries to respond to the review results. China last underwent a review in 2021.
Despite enjoying the conveniences of the global free market economy, the Chinese authorities shamelessly use non-market policies and practices to undermine other countries’ interests, sparking outrage.
In this meeting, the EU raised about 10 shortcomings and recommendations regarding China’s trade-related policies and measures, highlighting distortions brought by the authoritarian industrial policies; the increasing politicization of the Chinese business environment, lacking fair competition; and China should no longer enjoy developing country status, among others.
Additionally, Taiwan representative Luo Chang-fa criticized the Chinese authorities for implementing unilateral trade restrictions on Taiwanese agricultural products and other illegal and inappropriate actions, calling on China to address structural problems, engage in bilateral consultations with Taiwan to resolve disputes.