The Politics of Compliance with Adverse WTO Dispute Settlement Rulings in China

Starting from 2004, China's trading partners, in particular the United States, have increasingly utilized the World Trade Organization (WTO) dispute settlement system (DSS) to challenge China's trade-related measures. As a major player in world trade, how China responds to adverse rulings is not only important to its trading partners, but also for the future of the international trade regime. China has thus far held a relatively good compliance record when facing adverse panel and/or Appellate Body rulings, except for the recent delay in full compliance in China—Publications and Audiovisual Products. Through examining the factors affecting China's decision making when targeted in a WTO dispute, this article finds that, in general, China is highly motivated to comply with the WTO DSS due to the reputational costs of noncompliance. Nevertheless, the recent delay in compliance in China—Publications and Audiovisual Products also demonstrates that successful implementation could be impeded by certain politically influential interest groups, especially when the measure at dispute is politically sensitive.     

China's good neighbor policy and its implications for Taiwan

Chinese leaders in recent years have been following a coherent policy toward Asia that emphasizes moderation and accommodation while preserving core PRC interests. China's prevailing ‘good neighbor’ policy approach—backed by improvement in US–China relations—provides important opportunities and challenges for Taiwan. It clearly inclines the PRC leaders to avoid more aggressive or harder‐line tactics in the mix of carrots and sticks that makes up China's recent approach toward Taiwan. To follow a more disruptive course would undermine the influence and advantage Beijing has been seeking with its ongoing moderate approach toward the United States and other Asian powers. The main challenge for Taiwan is how to deal with the current balance of carrots and sticks in China's policy. Much depends on the ability of Taiwan's leaders and populace to turn the prevailing balance in PRC policy to Taiwan's advantage. This presumably will involve reviving their economy, promoting effective governance and prudent defense, while consolidating relations with the United States and managing tensions in cross‐Strait relations to the advantage of Taiwan's future security and development. Unfortunately, there is no political consensus on Taiwan to mobilize domestic resources and opinion in a concerted effort to protect Taiwan's future as an entity independent of PRC control. Those outsiders who have followed with positive interest Taiwan's remarkable development over the past decades hope that Taiwan makes good use of the opportunities posed by China's good neighbor policy to adopt prudent and concrete measures beneficial to Taiwan's long range prospects.     

Preservation,Prosperity and Power: what motivates China's foreign policy?

This article describes the motives behind the making of the current status-quo and risk-averse Chinese foreign policy. It identifies a three-P incentive structure that is based on the political preservation of the CCP regime, China's economic prosperity, and Beijing's pursuit of power and prestige. These three motives are stable and overlapping, featuring Taiwan and the relationship with the United States as the key issues. Beijing is expected to be motivated by these peculiar motives over the next two decades; but new internal and external developments may greatly change these motives and generate new impetus for China's foreign policy. Although the official line in Beijing is still the mild ‘peaceful development’, after a fling with the more majestic idea of ‘peaceful rise’, the rise of nationalist emotions and demands in the PRC continues.     

China's WTO Membership and the Non-Market Economy Status: discrimination and impediment to China's foreign trade

This article provides a Chinese perspective on the terms of China's WTO accession, highlighting the negative impact of some discriminatory conditions that China accepted in order to join the WTO on its foreign trade and global competitiveness in the last decade. The author uses the non-market economy status of China as a case study to support the argument that these discriminatory conditions imposed on China upon accession have not only impeded the healthy development of China's foreign trade, but also violated the ‘non-discrimination’ principle of the WTO.     

International Political Economy from a Chinese Angle

In the 1990s, international political economy (IPE) as a set of concepts to interpret the current and future world system caught on quickly among Chinese scholars and policy analysts. Recent events (the Asian financial crisis and the US role, WTO negotiations, US‐Japan trade disputes) combined with China's historical experience (imperialism, war, revolution) and aspirations (to be a regional power) have given IPE specialists a different perspective on and language for the issues and events of today's global political economy. Zhu Wenli highlights the divergence between US and PRC views and interpretations on concepts of hegemony (the role of the US in a unipolar system), globalization, development models, and economic security, arguing that understanding this theoretical gap helps us to understand the current policy gap. She concludes with a reference to the limited role that international relations concepts and ideas play in the formation of foreign policy.     

Performance Legitimacy,State Autonomy and China's Economic Miracle

Theories that explain post-Mao China's economic success tend to attribute it to one or several ‘successful’ policies or institutions of the Chinese government, or to account for the success from economic perspectives. This article argues that the success of the Chinese economy relies not just on the Chinese state's economic policy but also on its social policies. Moreover, China's economic success does not merely lie in the effectiveness of any single economic or social policy or institution, but also in the state's capacity to make a policy shift when it faces the negative unintended consequences of its earlier policies. The Chinese state is compelled to make policy shifts quickly because performance constitutes the primary base of its legitimacy, and the Chinese state is able to make policy shifts because it enjoys a high level of autonomy inherited from China's past. China's economic development follows no fixed policies and relies on no stable institutions, and there is no ‘China model’ or ‘Beijing consensus’ that can be constructed to explain its success.     

The Terrorist Risk and China's Policy toward Pakistan: strategic reassurance and the ‘United Front’

This paper examines how growing insecurity in Pakistan—affecting the security of Chinese expatriates and neighboring Xinjiang—impacts China's policy towards its ‘all-weather’ friend. It argues that managing the terrorist risk in a changing regional environment has led to a double adjustment in China's policy towards Pakistan. First, counterterrorist cooperation has moved up the policy agenda, albeit with a peculiar modus operandi, focused on sustaining a pro-Chinese ‘United Front’ in Pakistan. Second, Beijing has positively reassessed Pakistan's strategic value and moved towards strategic reassurance, although the construction of a trade-and-energy corridor between Gwadar and Xinjiang has been negatively affected by the risk of violence.     

China's Rise in Southeast Asia: implications for the United States

During the past few decades, China's economic success has permitted it to pursue a greater role on the international stage. China is recognized both as a regional and aspiring global power. Nowhere is this more evident than within Southeast Asia, where China's more active diplomacy is reflected in growing trade relations, proposals for stronger security ties, and the signing of numerous cooperative agreements on issues as varied as environmental protection, drug trafficking, and public health. As a whole, the region has received China's activism with both enthusiasm and trepidation. China has expended significant effort to assuage the fears of its neighbors by adopting a foreign policy approach that is active, non-threatening, and generally aligned with the economic and security interests of the region. This positive diplomacy has clearly yielded some success, most notably in the trade realm, where China is rapidly emerging as an engine of regional economic growth and integration that may well challenge Japanese and American dominance in the next three to five years. In the security realm, China's diplomacy, while rhetorically appealing to regional actors, has yet to make significant inroads in a regional security structure dominated by the United States and its bilateral security relationships. Most significantly, however, if China is to emerge as a real leader within Southeast Asia, it will also need to assume more of the social and political burden that leadership entails. As China continues to advance itself as a regional leader, its policies on issues such as health, drugs, the environment and human rights will face additional scrutiny not only for their impact on the region but also for the more profound question they raise concerning the potential of China's moral leadership. For the United States, China's greater presence and activism suggest at the very least that it cannot remain complacent about the status quo that has governed political, economic and security relations for the past few decades. Shared leadership within Southeast Asia will likely include China in the near future, with all the potential benefits and challenges that such leadership will entail.     

China and Major Power Relations in East Asia

Tremendous changes have taken place in East Asia in the post-Cold War era, which have a great impact on Chinese foreign policy and its relations with major powers in East Asia. This new power configuration is related to as 'two ups' and 'two downs', which have become apparent since the early 1990s. The 'two ups' concern the rise of the United States and China. The United States' rise to sole superpower status has given Washington a dominant role in all four dimensions of world affairs: political, strategic, economic, and technological/cultural. Meanwhile, China has achieved a spectacular economic performance for the past two decades, sustaining high growth rates, and escaping, so far, the Asian economic crisis of 1997‐98. This expansion has greatly increased China's influence in regional and global affairs. The 'two downs' refer to the downturns of Russia and Japan. This article provides a detailed analysis of China's international environment in the context of the changing dynamics of major-power relations in East Asia. Special attention is paid to the crucial Beijing‐Tokyo‐Washington triangle. The examination focuses upon political, economic, and strategic dimensions.     

A Wave to Worry About? Public opinion,foreign policy and China's anti-Japan protests

Comparing China's 2012 anti-Japan protests against three previous rounds of anti-Japan protests in 1985, 1996 and 2005 reveals a cyclical pattern, best characterized as a wave of popular mobilization. In each case, external events sparked a swell of public anger and activism which Chinese leaders initially tolerated before cooling. This pattern of contained contention has not led to Beijing loosening control over its foreign policy. However, the 2012 protests did feature one new element: a consumer boycott augmented by China's more assertive economic statecraft.     

The rise and decline of China's export processing zones

Accepting the Grindle/Thomas argument that developing states enjoy a high degree of autonomy, this article takes a case study approach to analyze the dynamics of Chinese foreign economic policy. The article posits that contending elites coalesced around particular visions of economic development, which have been the major variable affecting the Chinese export processing zone (EPZ) policy. Thus the current decision to rescind SEZ preferences is based on the elites’ decision to ‘deepen’ China's outwardly‐oriented development.     

Sino‐US security relations: The PLA factor

Sino‐US security relations have evolved into a very complex and often precarious military relationship. The influence of the People's Liberation Army in China's national security strategy and foreign policy formulation is on the rise. The United States has begun to prepare for a strong and vociferous Chinese military by addressing this trend especially within the areas of China's nuclear programme, Asian disputes over territorial claims, and the Chinese military's modernization programme.     

金触危机下美国对华贸易保护与中国政府的应对策略——以＂轮胎特保案＂为视角

金融危机导致国际贸易萎缩,继而加剧国际市场竞争,也促使各国采取更为保守的贸易政策和措施,从而加剧国际贸易摩擦。最近发生的轮胎特保案就是由于美国奉行贸易保护政策的典型实例。美国的贸易限制对中国经济的影响非常大,不仅直接影响到中国众多企业的生存发展,而且会对中国整个经济发展带来冲击。如何应对美国对华实施的贸易保护政策已经成为一项非常复杂而又十分紧迫的任务,这其中,政府的引导和协调起着不可替代的主导作用。     

From functional integration to structural readjustment: Taipei–Beijing relations and the role of the United States

Regardless of the continued stalemate in the political arena, trade and economic interactions between the two sides of the Taiwan Strait have increased steadily. Both aggregate data and the results of survey research have testified to the existence of functional integration of the two societies across the Taiwan Strait. In addition to functional integration, structural readjustments have also been made by political authorities both in Taipei and Beijing so as to facilitate continuity of trade and economic relations. These types of mutual accommodations include: establishing proper ‘unofficial’ agencies on both sides to serve as instruments of practical contacts and negotiation; the more flexible definition of ‘One China’ by Beijing; and the opening of ‘small links’ between Quemoy and Amoy by Taipei. Beijing's refusal to grant Taipei any official diplomatic status and Taipei's reluctance to accept the ‘One China’ principle remain major obstacles to cross‐Taiwan Strait relations. The United States will continue playing a key role in future cross‐Strait relations. Beijing seems to be content, at least temporarily, to maintain cordial relations with the United States in exchange for the latter's adherence to the ‘One China’ principle and rejection of the option of Taiwan independence. Whether Taipei will use enhanced US commitment to Taiwan's security to strike a better deal with Beijing for gradual cross‐Strait integration or to utilize increased American protection to move onto the separatist road will be affected by domestic politics in Taiwan, future US policy toward to the island, and Beijing's response to Taipei's demand for security and international recognition.     

The Hong Kong Policy of the People's Republic of China, 1949-1997

China's policy toward Hong Kong in the period 1949-1997 was primarily driven by utilitarian calculations of national interests and the interests of the Chinese Communist Party. The Hong Kong policy of China, as an integral part of its foreign policy, was distinctive in that ideological fervor and nationalist passions had limited influence. The goals to be achieved by the Hong Kong policy remained unchanged throughout the period; the strategies adopted, however, changed in accordance with the changing international situation and the national interests as defined by the Chinese leaders. The primary goals of the Hong Kong policy were to secure a less threatening external political environment for China and to make calculated use of Hong Kong for China's economic development. By tolerating Hong Kong as a British colony, China also depended on Britain to control the potentially threatening anti-Communist Chinese population there. The 'over-dependence' on the British to control the Chinese people in Hong Kong on the eve of Hong Kong's reversion to China, however, alienated the Hong Kong people as well as impeded the formation of local political leaders in the territory. As a result, the acquisition of Hong Kong by China in 1997 has not been accompanied by political rapport between the Chinese government and the Hong Kong people, thus sowing seeds for lingering friction between them.     

China's Economic Diplomacy towards the Arab Countries: challenges ahead?

Since the outbreak of the Arab revolts in late 2010, China has adhered to its ‘business-first’ economic diplomacy towards the Arab countries, a policy driven by China's ongoing geoeconomic interests. The ten-year-old China–Arab States Cooperation Forum serves as the nucleus for China's economic diplomacy in the region. The Chinese authorities have also initiated interagency coordination and central–local governments' power sharing in order to pursue this diplomacy successfully. However, while its economic diplomacy may be evolving, China, unlike what it has achieved in Black Africa, seems to have failed to develop strategic, political and cultural exchanges with its Arab counterparts. The intertwined geopolitical and geoeconomic factors that have emerged since the Arab revolts might make it harder for China to reap economic benefits while shelving political entanglement to sustain this economic diplomacy in the longer run.     

Multilateral versus Bilateral and Regional Trade Liberalization: explaining China's pursuit of free trade agreements (FTAs)

In recent years, at the same time it has pursued multilateral trade negotiations via membership in the World Trade Organization (WTO), China has embraced a regional approach to trade liberalization by negotiating a number of bilateral or regional free trade agreements (FTAs) with its trading partners. This paper examines China's increasingly active FTA diplomacy and seeks to explain China's motives for pursuing expanded FTAs. Specifically, this paper argues that while China's FTA activism reflects considerations about enhancing China's influence in the Asia–Pacific region, capturing the economic gains of FTA participation, and minimizing the trade and investment diversion resulting from the competitive dynamics of regional trade liberalization, the move toward expanded FTAs is also consistent with the desire to create alternative bargaining forums over trade issues that could help to stabilize expectations as well as the need to use FTAs to control the pace of trade liberalization so as to accommodate protectionist pressure emanating from domestic interest groups. In particular, this paper highlights the impact of domestic politics on China's FTA negotiations through a detailed discussion of how pressure from protectionist seeking interests influences the scope and depth of China's FTAs.     

Taiwan as a Factor in China's Quest for National Identity

The premise of this paper is that China has a divided national identity, characteristic of a category of nation-states divided for political reasons since World War II. Until 1999, responsibility for this sense of national division could be diffused, but since the retrocession of Hong Kong and Macao, frustration and blame have focused on Taiwan, the last remaining symbol of China's ‘national humiliation’. Characteristic of such a divided identity are ambivalent feelings, aiming on the one hand to idealize and desire to incorporate the ‘missing’ or ‘lost’ segment of the nation, and on the other to punish it for refusing to return. It is important to understand that Chinese feelings about Taiwan are not a simple reflection of empirical developments on the island, but also project latent ideas about China's own unresolved national identity. China's attempts to overcome this division have undergone several changes, making significant progress while encountering difficult (and as yet still insuperable) obstacles.     

WTO and China's Financial Services Sector

Financial services, particularly securities markets, insurance and commercial banking, have played a crucial role in China's post-1978 economic reforms. China has so far established a market structure and a legal framework, and has a growing understanding of how financial services operate in the modern world economy. We will review China's progress in financial services reforms over the last 22 years, describe the commitments China has made to gain WTO entrance, and then evaluate the potential benefits and costs to China's financial sector of WTO accession. We conclude that even with the substantial challenges presented by greatly increased post-WTO foreign competition, China will benefit from the WTO because of a number of factors including a growing pool of well-trained personnel, lessons learned from domestic and foreign development experiences, increasing Chinese economic strength, and continual advancement of China's financial infrastructure.     

China's Unbalanced Economic Growth

This paper summarizes empirical findings and results from the author's most recent research publication in Chinese: China's Unbalanced Economic Growth. It studies China's economic growth with a special emphasis on its regional disparities. It provides an analysis of China's overall economic landscape as well as an empirical study of China's unbalanced regional development. Based on its quantitative findings and results, the author predicts the emergence of ten Chinese metropolitan economies in the early twenty-first century and recommends a regional development strategy as well as implementation policies for China's future development. The major empirical findings, results and conclusions of this research are outlined in three sections: the first describes China's economic future—the emergence of ten regional metropolitan economies, the second reports the empirical findings of China's national and regional economic disparities and discusses policy implications, and the third investigates China's future economic growth and discusses its growth limitations.