The China Paradox: What Trade Rules for a (Developing) Economic Powerhouse? (Pre-Recorded)

• In Event: The Politics of the Backlash Against Globalization: Discourse, and Attitudes

Abstract

The trading system grants developing countries special and differential treatment (SDT) and allows them greater scope to use measures to foster development. But the question of how China should be classified and treated has become an acute source of conflict. The reason for this, I argue, is that China’s rise represents a new and unprecedented bifurcation of economic power and development status. The China paradox – the fact that China is now both a major economic power and a developing country with relatively low per capita incomes – has created significant challenges for trade governance. China insists that, as a developing country, it should be entitled to SDT. In this paper, however, I show that extending SDT to China is increasingly problematic. Although China remains a developing country, given the size of its economy, its policies have major systemic consequences for the global economy and trade. While there has been considerable attention to China’s industrial subsidies, I show that China is providing large volumes of subsidies in agriculture and fisheries, which have harmful effects on other developing countries. Exempting China from global trade disciplines by granting it SDT therefore threatens to jeopardize efforts to promote global development and protect the global environment.

Author

• Kristen Hopewell, University of British Columbia