China's SOE Reform: Using WTO Rules to Build a Market Economy

International and Comparative Law Quarterly, 2019, Vol 68, Issue 2 (Forthcoming)

Society of International Economic Law (SIEL), Sixth Biennial Global Conference

60 Pages Posted: 11 Jul 2018 Last revised: 20 Jan 2019

See all articles by Weihuan Zhou

Weihuan Zhou

University of New South Wales

Henry S. Gao

Singapore Management University - School of Law

Xue Bai

University of New South Wales (UNSW) - Faculty of Law

Date Written: July 1, 2018

Abstract

This paper explores one of the most significant and pressing challenges for the multilateral trading system, that is, how the WTO rules may be utilized to deal with China’s state capitalism. The paper observes that the recent rounds (including the current round) of state-owned enterprise (SOE) reform in China have strengthened rather than weakened state capitalism and have created increasing sophistications in China’s market-oriented transformation. It argues that while the general GATT rules are limited in terms of the types of policy instruments and the scope of obligations, the WTO rules on subsidies and countervailing measures, coupled with China’s WTO-plus commitments, have provided sufficient defense against the encroachment of Chinese SOEs beyond its own shores. In this context, the paper submits that anti-dumping, which is designed to tackle activities of businesses or firms, has been over-used and even abused by WTO Members in dealing with state intervention and market distortions in China. Thus, WTO Members should now shift their focus to exploring the utility of the subsidy and China-specific rules to overcome the challenges arising from China’s state capitalism.

Keywords: State-owned enterprise; WTO; State capitalism; Anti-dumping; Subsidy; Countervailing measures; WTO-plus obligations.

Suggested Citation

Zhou, Weihuan and Gao, Henry S. and Bai, Xue, China's SOE Reform: Using WTO Rules to Build a Market Economy (July 1, 2018). International and Comparative Law Quarterly, 2019, Vol 68, Issue 2 (Forthcoming); Society of International Economic Law (SIEL), Sixth Biennial Global Conference. Available at SSRN: https://ssrn.com/abstract=3209613 or http://dx.doi.org/10.2139/ssrn.3209613

Weihuan Zhou (Contact Author)

University of New South Wales ( email )

Room 368, the Law Building
UNSW Sydney, 2052
Australia
+61 2 9385 9562 (Phone)

HOME PAGE: http://https://www.law.unsw.edu.au/staff/weihuan-zhou

Henry S. Gao

Singapore Management University - School of Law ( email )

55 Armenian Street
Singapore, 179943
Singapore

HOME PAGE: http://www.law.smu.edu.sg/faculty/law/henrygao.asp

Xue Bai

University of New South Wales (UNSW) - Faculty of Law

Kensington, New South Wales 2052
Australia

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