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CHINA'S STATE CAPITALISM AND WORLD TRADE LAW

Published online by Cambridge University Press:  24 April 2014

Ming Du
Ming Du*
Affiliation:
Reader in Law, Lancaster University Law School. E-mail: michael.mingdu@gmail.com.
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Abstract

Melding the power of the state with the power of capitalism, state-owned and state-controlled enterprises continue to control the commanding heights of the Chinese economy even though market-oriented reforms have led to a rapid expansion of the private sector in China. This article reflects on how China's practice of state capitalism challenges the world trading system and how WTO law, as interpreted by WTO Panels and the WTO Appellate Body (AB), addresses these challenges. The article concludes that the WTO Agreement on Subsides and Countervailing Measures (SCM Agreement) has been interpreted in such a manner that many key features of China's state capitalism could easily be challenged by its trading partners in a WTO-consistent manner. This finding has profound implications for China's domestic economic reforms, especially China's ongoing reforms of its state-owned enterprises and commercial banks.

Keywords

Chinacountervailing dutiesstate capitalismWTO
Type
Articles
Information
International & Comparative Law Quarterly , Volume 63 , Issue 2 , April 2014 , pp. 409 - 448
Copyright
Copyright © British Institute of International and Comparative Law 2014 

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162 ibid, para 157.

163 Art 1.2 of the SCM Agreement.

164 WTO Appellate Body Report, United States – Definitive Anti-Dumping and Countervailing Duties on Certain Products from China (‘US–Anti-Dumping and Countervailing Duties’) WT/DS379/AB/R (11 March 2011) para 373.

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168 Art 3 of the SCM Agreement.

169 Art 3 and 2.3 of the SCM Agreement.

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172 Art 11.2 of the SCM Agreement.

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174 Qin (n 99) 903.

175 ibid 904.

176 Art 15(d) of China's WTO Accession Protocol.

177 Drake (n 19).

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181 USDOC, Countervailing Duty Investigation of Coated Free Sheet Paper from the People's Republic of China – Whether the Analytical Elements of the Georgetown Steel Opinion are Applicable to China's Present-Day Economy (29 May 2007).

182 Government of the People's Republic of China v United States, 483 F Supp 2d 1274 (Ct Intl Trade 2007).

183 ibid 1282. The court said that the Georgetown Steel court only affirmed USDOC's decision not to apply CVD law to the NMEs in question in that particular case and recognized the continuing broad discretion of the agency to determine whether to apply CVD law to NMEs.

184 Ahn and Lee (n 178) 346.

185 WTO Appellate Body Report (n 164).

186 ibid para 278.

187 ibid para 317.

188 ibid para 319.

189 ibid para 318.

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191 WTO Appellate Body Report (n 164) para 318.

192 ibid.

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194 Brodsgaard (n 65) 641.

195 WTO Appellate Body Report (n 164) para 319.

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204 ibid para 349.

205 ibid paras 350–351.

206 ibid para 400.

207 ibid.

208 Wouters and Coppens (n 158) 29.

209 WTO Panel Report, United States–Subsidies on Upland Cotton, WT/DS267/R (8 September 2004) para 7.725.

210 WTO Appellate Body Report (n 164) para 395.

211 Prusa and Vermulst (n 202) 229.

212 WTO Appellate Body Report (n 164) para 385.

213 ibid para 416.

214 Council Implementing Regulation 452/2011, Coated Fine Paper from China, Official Journal of the European Union (OJ) 2011 L128/18 (definitive countervailing duty) paras 252–258.

215 ibid.

216 WTO Appellate Body Report (n 164) para 446.

217 ibid para 509.

218 WTO Panel Report (n 201) para 10.82.

219 ibid paras 10.76–10.82.

220 WTO Appellate Body Report (n 164) para 441.

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232 ibid para 10.184.

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237 Drake (n 19).

238 Wouters and Coppens (n 158) 33.

239 Dukgeun (n 198) 764.

240 Council Implementing Regulation 452/2011 (n 214).

241 ibid.

242 F Allen et al,‘China's Financial System: Challenges and Opportunities’ (2011) <http://www.nber.org/papers/w17828>.