The White House on Friday asked the Office of the United States Trade Representative to pressure by any means necessary the World Trade Organisation (WTO) to reform the definition of what constitutes developing country status.
It also warned that the United States might take matters into its own hands if no major progress is made within 90 days. This ultimatum represents a violation of WTO rules and is a typical act of hegemony.
It is a longstanding practice for WTO members to declare development status. It is a major cornerstone of the global trading system, as it helps to ensure sustainable economic growth for developing countries by providing special and differential treatment.
However, the United States has always been dissatisfied with this basic WTO principle, as it believes fast-developing economies have taken advantage of it. The clamour to strip China of developing country status has become even louder since the country became the second largest economy in the world in 2010.
The definition of what constitutes a developing country should not be based on a single yardstick. It should be a combination of several, including total economic volume, GDP per capita, industrial structure, innovation capabilities, and national income distribution.
China is home to nearly 1.4 billion people, so although almost any aggregated economic metric looks impressive at first glance, they don’t look so good on a per capita basis. China’s economy totals nearly 14 trillion U.S. dollars but GDP per capita is less than 10,000 U.S. dollars, which is below the global average and less than one-sixth of the per capita GDP of the United States.
In addition, China’s development is unbalanced, as there are both modern metropolises like Beijing and Shanghai and more than 500 poor counties with over 16 million underprivileged people. The gap between China and the United States is the gap between the largest developing country and the largest developed country. Denying China developing country status due to its total economic size is not a well-grounded argument.
At present, the world economy is characterised by the rise of emerging markets and developing countries. This does not run counter to their status at the WTO, nor does the Belt & Road Initiative, which aims to promote the shared development of countries along the route.
The irrational claim by the United States that China is already a developed country is merely an attempt to deprive China of its rights and interests as a developing country.
The 12th round of China-U.S. high-level trade consultations will be held in Shanghai in the coming week. It is with the trade talks in mind that the United States is trying to pressure the WTO to reform the definition of developing country status by all means necessary.
This not only shows that the United States is dissatisfied with the existing WTO rules, but also its desire to put more pressure on China by gaining greater leverage for negotiations on issues such as intellectual property right protection and market access. But China will by no means succumb to pressure or blackmail that affects its core interests.