Scapegoating China means retreat from WTO promise
Aconcerted effort is being made by some Western powers and Japan, their local ally in Asia, to continue using the “proxy method” for measuring the price of imports from China. To China’s dismay, these countries have determined to keep using the method despite a pledge made by the members of the World Trade Organization upon China’s accession to the world’s free trade regime in 2001 that they would drop the method after 15 years.
Their decision is based, they claim, on the consideration that China remains a non-market economy. But it ignores the contractual period that they themselves agreed upon, while their decision that China is not a market economy is one made by their governments, and hence political.
Over the past 15 years, huge efforts have been made by China and Chinese companies, large and small, to comply with all the requirements set by the WTO. Dismissive of this as it is, the decision serves to give the businesspeople of China the impression that it is a badly disguised attempt at protectionism and signals these economies cowardly retreat from the free trade principle that their governments so loudly touted when their domination of the world market seemed unchallenged.
By denying China market economy status those governments appear to seek a convenient pretext for discriminating against a country that has contributed more trade, more growth, and more opportunities to the world than any other trading nation has done.
They choose to ignore the fact that China’s increasing profile in global trade would not have been achievable through primarily non-market economy methods. Only by following market economy principles could the business potential of a nation of more than 1.3 billion people be so quickly and near miraculously released.
To attribute China’s success in global trade as a phenomenon of it being a non-market economy is in itself an act to shame the market economy.
If a non-market economy can grow so fast, why do other nonmarket economies fail? And if a non-market economy can grow faster than market economies, why do people need a market in the first place?
Improbable as the core argument is, the denial of China’s full WTO rights may signal a very serious trend. If it is targeted not only to China, but to all competition, then it may signal the collapse of the rules-based system of global trade that is essential for a strong, open and sustainable world economy.