China's Change in WTO Status

China has announced a shift in its trade policy by forgoing the special treatment offered to developing countries under World Trade Organization (WTO) agreements. This change aligns with long-standing demands by the United States.

Reasons for the Change

• Boost the global trading system amid threats from tariff wars and protectionism.
• Aim for reform in global trade talks, making WTO more effective.

Despite this shift, it remains unclear whether foreign goods will gain greater access to China's market.

Details of the Announcement

• Announced by Chinese Premier Li Qiang at a China-organized development forum during the U.N. General Assembly meeting.
• Applies only to ongoing and future negotiations, not to existing agreements.
• Described by China's top WTO envoy, Li Yihong, as a voluntary decision, not intended to influence other developing countries.

Impact on Developing Country Status

• China emphasizes its status as a middle-income, developing country.
• U.S. challenges China's developing-country status due to its economic size.
• WTO's "special and differential treatment" gives leniency on trade agreement implementation and rule exceptions for developing countries.

China's Role in Global Development

• Increasingly a source of loans and technical assistance for infrastructure projects abroad.
• Major projects often executed by Chinese state-owned companies.

WTO Context and Reactions

• WTO does not officially distinguish between developed and developing countries; self-identification is common.
• WTO has become less effective, prompting reform discussions.
• The WTO director-general Ngozi Okonjo-Iweala termed China's decision as "major news key to WTO reform."