China and World Trade Law: Are the Current Rules Fit for Addressing the Distortions Inherent in the Chinese Model of State Capitalism?

In the span of just 15 years following its accession to the WTO, China climbed to the top spot in the ranking of the world’s largest exporters of merchandise and became the fifth largest exporter of services in the world. China’s staggering export performance – unleashed by its accession – poses serious challenges for many WTO Members. It has now become common to claim that China’s export performance is attributable to its not playing by the rules of the game, i.e., WTO law. Business representatives, trade experts and policy makers often object to the high degree of government intervention in the economy and direct participation in the markets through State-Owned Enterprises. This project primarily aims at answering the question whether the current rules of the WTO provide Members with sufficiently effective tools for disciplining the international trade distortions induced by the economic policies of the Chinese government. The question will be answered by performing a systematic review of the determinations made by the authorities of the US, EU and several other countries in anti-subsidy and anti-dumping investigations concerning Chinese imports. In the second part, I will explore pragmatic approaches to managing trade tensions with China that do not require amending the rules, such as price undertakings in trade defense investigations and voluntary export restraints (VERs). The questions surrounding the available mechanisms will be answered on the basis of two case studies: one on the price undertakings used by the EU in the recent solar panels investigations, and one on several well-known VERs.