China: Rule-Taker, Rule-Shaker Or Rule-Maker?

Despite its ascent on the world stage, SMU Associate Professor Henry Gao’s research shows that China may prefer to keep a low profile in global organisations.

AsianScientist (Aug. 10, 2016) – by Feng Zengkun – To see the world’s future, one has to look to China. The country already has the world’s second largest economy, and it is projected to overtake the United States for pole position by the year 2020.

While its size means that its actions can have outsized effects on the rest of the world’s trade, its record in global trade organisations suggests that it may not want to rock the boat too much, says Henry Gao, Associate Professor at the Singapore Management University (SMU) School of Law.

Professor Gao specialises in the World Trade Organisation’s (WTO) laws and, in particular, China’s role in the organisation. His work has been widely cited, including by the US and Chinese governments, the United Nations (UN) and the WTO. He has also served as an advisor to the Ministry of Commerce of China and WTO.


Taking a backseat

“Judging from China’s past record in the WTO, it is unlikely that China will propose any sweeping changes to the governing structure of the institution,” he says.

“Instead, China will most likely focus on refining the technical rules that fine-tune the system.”

While many analysts had predicted that China would seek a leadership role in the WTO in its first decade as a member, Professor Gao notes that it has instead kept a low profile for several reasons, including to digest and implement the unusually heavy requirements attached to its membership, and to familiarise itself with the WTO’s procedural rules.

It might also have wanted to avoid drawing attention to its awkward position on some issues. While China has called itself a developing country for political reasons, some of its interests actually lie closer to those of developed countries. Developing countries want to eliminate export subsidies and reduce domestic support for agricultural products, for instance, to raise the commodities’ prices and their income, but such measures would hurt China, which is one of the world’s largest importers of wheat, cotton and soya beans.

“Due to the difference between China’s political position and economic interests, it would be politically awkward for China to openly deviate from the ‘party line’ of developing countries. Thus, the best strategy seems to be to keep a low profile,” Professor Gao says.

On the other hand, in contrast to its reticence in WTO negotiations, it has transformed from a reluctant player to a forceful litigant in WTO dispute settlement cases, and sought to change rules that it finds discriminatory toward itself. It has also aggressively pursued regional trade agreements with other countries.

Professor Gao has written up his findings in a paper, “China’s Ascent in Global Trade Governance: From Rule Taker to Rule Shaker, and Maybe Rule Maker?”, published in a Cambridge University Press book, Making Global Trade Governance Work For Development. NEXT PAGE >>>

A premier university in Asia, the Singapore Management University is internationally recognized for its world-class research and distinguished teaching. Established in 2000, SMU’s mission is to generate leading-edge research with global impact and produce broad-based, creative and entrepreneurial leaders for the knowledge-based economy.

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