China gets tag of ‘developing country’ at the WTO

Contact Counsellor

China gets tag of ‘developing country’ at the WTO

  • China's ambassador to the World Trade Organization said that Beijing would remain a ""developing"" country at the global trade body but would forego many of the benefits, signalling an important shift to trading partners.
  • China, which has the world's second largest economy, is this week celebrating 20 years since joining the Geneva-based trade watchdog, during which it has seen outstanding economic growth thanks largely to its participation in global trade.

Benefits of ‘developing country’ tag

  • Certain WTO agreements give developing countries special rights through ‘special and differential treatment’ (S&DT) provisions, which can grant developing countries longer timeframes to implement the agreements and even commitments to raise trading opportunities for such countries.
  • WTO pacts are often aimed at reduction in government support to certain industries over time and set more lenient target for developing nations and grant them more time to achieve these targets compared to developed ones.
  • The classification also allows other countries to offer preferential treatment.

How is a ‘developing country’ decided and why are some against China being classified as one?

  • The WTO has not defined ‘developed’ and ‘developing’ countries and therefore member countries are free to announce whether they are ‘developed’ or ‘developing’.
  • However, China’s per capita income has risen to become an upper middle-income country according to the World Bank and the country is alleged to use of unfair trade practices such as preferential treatment for state enterprises, data restrictions and inadequate enforcement of intellectual property rights.
  • Thus, a number of nations have called on China to either refrain from seeking benefits available to developing countries or forego its classification as a developing country altogether.