China has declared it will effectively give up the preferential treatment granted to developing countries in World Trade Organization (WTO) negotiations. Because the United States has long said China abuses its developing-country status and has demanded it give it up, observers say the decision was made with trade talks with the U.S. in mind.
According to China's state-run Xinhua News Agency, Li Qiang, premier of the China State Council, said at the High-Level Meeting on the Global Development Initiative (GDI) held at the United Nations headquarters in the U.S. on the 23rd (local time) that "China will no longer seek new special and differential treatment in future WTO negotiations."
Li Chenggang, China's Ministry of Commerce international trade representative and Vice Minister, said at a briefing that day that it was "an important policy declaration made externally by China with both domestic and international situations in mind," and "an important step to firmly safeguard the multilateral trading system and to actively implement the Global Development Initiative and the Global Governance Initiative." He then noted that behind the decision was the fact that "some countries" launched trade wars and tariff wars, dealing a serious blow to the multilateral trading system.
However, Vice Minister Li repeatedly stressed that China's status and identity as a developing country have not changed. He said, "It is a systemic right that China, which joined the WTO in 2001 as a developing country, received preferential and differential treatment," adding, "At the same time, China has actively participated in multilateral trade negotiations, and in concrete agenda negotiations, it addresses related issues independently and substantively by aligning them with its own level of development and capabilities."
Bloomberg said China's decision to give up developing-country status "resolves points of contention with the United States that had been obstacles in trade negotiations." Earlier, U.S. President Donald Trump, since his first term, had urged China to give it up, saying that despite its economic power China was unfairly using its developing-country status to receive trade preferences.
WTO developing-country status can be claimed at a member's discretion without formal criteria. Declaring developing-country status allows a country to receive benefits such as grace periods for implementing WTO rules, eased obligations on trade liberalization, and various forms of assistance.