2023 Report to Congress on China’s WTO Compliance

USTR Reports China’s Approach to International Trade is “State-led, Non-market and Predatory” 

The United States Trade Representative (USTR) has published its annual Report to Congress on China’s WTO Compliance. The report indicates that China’s practices pose serious challenges to the international trading system due to policies that emanate from its “state-led, non-market – and predatory – approach to the economy and trade.”

The USTR report indicates that China’s track record with WTO compliance has been poor. It has made limited progress away from being a state-led economy, that has instead in the interim developed complex and broad policies designed to evade WTO obligations. Simultaneous with its evasion policies, China has benefitted from WTO framework over the past 22 years, growing to become the WTO’s largest trading member. Indeed, the Chinese government’s role in its economy seems to be increasing, not receding; it boasts of “economic reform,” but the shape that reform takes includes deepening management of the economy by the state, buffering state-owned enterprises (SOEs), and implementing constitutional mandates to pursue a “socialist market economy with Chinese characteristics.”

Today, according to USTR, China is pursuing myriad globally-harmful policies and practices. Examples include domination by Chinese companies in key industries; control by the Chinese Communist Party (CCP) officials in key commercial decision-making; consistent and substantial subsidization of domestic industries; discriminatory regulations and practices; market access restriction; persistent NME excess industrial (steel, cement, electrolytic aluminum, glass, and shipbuilding) capacity; state-sponsored commercial theft; and much more.

With regard to U.S. trade policy toward China, USTR stresses that any approach must accommodate both short- and long-term goals to build resilience against the harm caused by China’s behavior, preferably in conjunction with our trade allies. Essentially, the U.S. is embracing a multi-faceted approach that incorporates enforcement actions, bilateral engagement, use of domestic trade tools, and cooperations with allied partners (e.g., the U.S.-E.U. Trade and Technology Counsel; the U.S.-Japan Partnership for Trade; and work within the G7, G20, and OECD).

A copy of the USTR report is available here.

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