Introduction: China and the WTO into the Next Decade: Probing the Past and Present as a

Path to Understand the Future

Author(s): Jean-Marc F. Blanchard
Source: Asian Journal of Social Science, Vol. 41, No. 3/4, SPECIAL FOCUS: Thinking about
China and the WTO 10 Years after Accession: Rationalist Approaches (2013), pp. 243-262
Published by: Brill
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 Asian Journal
of Social Science
BRILL Asian Journal of Social Science 41 (2013) 243-262 brill.com/ajss

Introduction

China and the WTO into the Next Decade:

Probing the Past and Present as a Path to

Understand the Future

Jean-Marc F. Blanchard
ShanghaiJiaotong University, School of International and Public Affairs

Abstract

This article surveys the literature on China and the World Trade Organization (WTO) and pro
vides background information on China and the WTO. It also identifies some future research
directions for those studying China and the WTO. Other important purposes are to summarise
the articles in this special issue and to highlight some of the answers they offer to a variety of
question. As useful as it is, the extant literature has various deficiencies. First, it is narrowly
focused, emphasising topics such as China's WTO accession, rather than China's compliance and
participation record. Second, a large proportion is becoming dated. Third, it is largely descriptive.
The contributions to this special issue address some of these problems by supplying us with con
temporary information about a number of WTO topics, such as China's fulfilment of its WTO
obligations in regards to trading and distribution rights, and the evolution of its intellectual prop
erty rights protection regime. They make a significant conceptual contribution by showing that a
cost/benefit framework can illuminate a wide variety of China-WTO-related phenomenon rang
ing from China's acceptance of highly demanding WTO accession terms to China's interactions
with Taiwan prior to and after the two party's respective entry into the WTO.

Keywords
China, World Trade Organization, Chinese foreign economic policy, TRIPS, TRIMS, trade policy

Introduction

China acceded to the World Trade Organization (WTO) in December 2001.

That year, in the words of former People's Republic of China (PRC) Minister of

* The author wishes to thank the AJSS editors and reviewers for their feedback. He also would
like to thank the Mr. & Mrs. S.H. Wong Foundation for sponsoring the conference that served as
the basis for this special issue. The views in this paper are the author's own and not those of any
institutions with which he is affiliated.

Koninklijke Brill NV, kcidirn, 2013 DOl: 10.1163/15685314-12341302

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244 /.-M. F. Blanchard / AsianJournal of Social Science 41 (2013) 243-262

Commerce Chen Deming (2011:12), Chinese leaders "facing multiple difficulties

and grave challenges... made a broad commitment regarding trade in goods,
services, and intellectual property rights." The recent 10th anniversary of Chi
na's WTO accession, not surprisingly, witnessed much fanfare.1 United States
(US) Ambassador to China Gary Locke (2011:16) touted, "In the 10 years since its
acceded... China has joined the ranks of the world's trading superheavy
weights." Pascal Lamy (2011), the current WTO Director-General, gushed that
China's 10 years in the WTO, had "witnessed an unprecedented transformation
of China's economy and society" with the WTO "serving as a stabilizer and
accelerator in China's economic take-off." For his part, Wan Jifei (2011:19),
Chairman of the China Council for the Promotion of International Trade and
the China Chamber of International Commerce, opined, "China has conscien
tiously implemented its WTO commitments," adding the measures it adopted
"improved... [its] market economic system and the fairness of its competitive
environment."

The economic implications of China's WTO entry have been profound. In

the years after 2001, China transformed into the world's largest trading nation
with exports jumping from about US$ 300 billion in 2001 to over US$ 1.5 trillion
by 2010, and bilateral trade with numerous Asian, North American and Euro
pean countries exploding over the pre-2001 period. Inward foreign direct
investment (IFDI) into China soared from US$ 48.9 billion in 2001 to US$ 105.7
billion by 2010. China has also witnessed the significant expansion of its manu
facturing sector, as well as more high-technology intensive, value-added activi
ties ("Historic Changes, Challenges Ahead," 2011; "What a Difference in a
Decade," 2011; and "Since its WTO Entry, China Has Become a Mayor Player in
Global Trade," 2011). While trade and IFDI are not the only casual factors, Chi
na's post-WTO entry further saw the country register an average of ten years of
double-digit growth. One might argue the political implications of China's
accession been consequential, too. For example, it increased the "universality
of WTO membership." In addition, it fuelled extensive Sino-American interde
pendence and South-South trade. As well, it has helped China develop a habit
of using legal tools to manage economic frictions, changed the state from a
"manager" to a "provider of public services," and yielded a more "open and
diversified" society and transparent government (Cross, 2004; Wang Yong,
2ona:3,8-9; Locke 2011:16; Wang Yong, 20116:33; and "Since its WTO Entry,
China Has Become a Major Player in Global Trade," 2011:34-37).
China and the WTO is hardly an unstudied subject. There are treatments
from multiple disciplinary angles. Moreover, commentators have covered a

Fora more subdued take, see "Trading Places" (2011).

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 y.-M. F. Blanchard / Asian Journal of Social Science 41 (2013) 243-262 245

myriad of China and WTO themes ranging from the impact of China's WTO
accession on Chinese farmers to China's opening of its service sectors to the
democratising effect of China's entry into the WTO. Moreover, governments
(such as the US) and international government organisations (IGOs) (such as
the European Union, EU) regularly report on China's fulfilment of its WTO
obligations.2 The existing literature, though, has various deficiencies. First, it is
narrowly focused, emphasising topics such as China's WTO accession, rather
than China's compliance and participation record, issues with greater contem
porary relevance. Second, the vast majority of the literature is becoming out
dated as it is more than ten years old. Third, it is largely descriptive. Clearly,
additional study is warranted.3
This special journal issue on China and the WTO rectifies these shortcom
ings while enhancing our understanding of this important topic in several
ways. One is that it supplies us with contemporary information about a num
ber of WTO topics, such as China's fulfilment of its WTO obligations in regards
to trading and distribution rights, the evolution of its intellectual property
rights (1PR) protection regime, and China's use of anti-dumping (AD) and
countervailing duty (CVD) measures. A second is that it is a work focused
purely on illuminating the China-WTO dynamic, though its findings remain
pertinent to those with wider theoretical and policy interests such as the WTO
developing world dynamic. Finally, it makes an important conceptual contri
bution by showing that a cost/benefit framework can illuminate a wide variety
of China-WTO related phenomenon ranging from China's acceptance of highly
demanding WTO accession terms to China's interactions with Taiwan prior to
and after the two party's respective entries into the WTO.
The next section surveys the literature on China and the WTO. The third
section provides extensive background information on China and the WTO
such China's compliance with various WTO agreements, such as Trade-Related
Intellectual Property Rights (TRIPS), Trade-Related Investment Measures
(TRIMS), and Technical Barriers to Trade (TBT) accords and the impact of
China qua WTO member. The fourth part summarises the articles in this spe
cial journal issue, as well as some of the answers they offer relating to the ana
lytical and theoretical question enumerated in the third section. The final part

2 See, for instance, The US Trade Representative (USTR)'s "Report to Congress on China's
WTO Compliance," which has been published every year since 2001. The reports are available
through http://www.ustr.gov.
3 One might argue additional study is timely, too, given all the trade issues on the global
agenda, rising fears about protectionism, attention to restructuring global economic institutions,
and concern about the future course of Chinese foreign economic and security policy.

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246 J.-M. F. Blanchard / Asianjournal of Social Science 41 (2013) 243-262

presents some concluding remarks and identifies some future research

directions.

The Literature

As noted, there are numerous publications and studies on China and the WTO.
There are so many, in fact, that one cannot summarise them all. Still, it is pos
sible to segregate them into five broad groupings.4 The first stresses China's
accession to the WTO. The second emphasises China's compliance with the
WTO, but primarily as one part of studies that are focused on China's compli
ance with international institutions more generally. The third group tackles
China's performance in regards to specific WTO treaties, such as TRIPS or the
opening of various market sectors. The fourth group gives attention to China as
a member of the WTO and various WTO negotiations. The fifth group is theo
retically oriented, seeking to confirm which theoretical schools (e.g., realism,
neoliberal institutionalism, or constructivism) are most useful in illuminating
the effect of the WTO on China, as well as the effect of China on the WTO. This
section provides general information on these various bodies of literature and
concludes with a general critique.
The vast majority of the literature on China and the WTO focuses on China's
WTO admission. Like Jean-Marc F. Blanchard's article on China's WTO acces
sion in this special issue, it chronicles the 15-year course of China's accession,
specifies China's WTO terms, reviews the factors that slowed, stalled and accel
erated China's entry at various points along the way, expounds on the eco
nomic and social costs that China faced as a consequence of joining the WTO,
and details why China accepted the WTO terms it did (Fewsmith, 2001; Lai,
2001; Kim, 2002; Liang, 2002; Breslin, 2003; Feng, 2006). In addition, it delves
into the opportunities created for businesses and the obstacles faced by com
panies seeking to exploit the policy changes China would be making (Mok,
2002; Agarwal and Wu, 2004; Chang et al., 2005). Furthermore, it speculates on
the likelihood that China will fulfil its commitments (Chan, 2004; Liew, 2005;
Mertha and Zeng, 2005). A smaller number of works within this group examine
the implications of China's WTO membership on developing and developing
countries, select industrial sectors within and without China, and so on

4 A nascent group researches "China as target," but the number of works in this group is too
small at present to warrant discussion. China "as target" refers to the issue of how other countries
are leveraging the WTO to manage China-related trade issues and broader trade goals, as well as
China's reaction to these countries' behaviours. An example of a study falling into the "China
as target" group is Zeng (2013).

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 J.-M. F. Blanchard / Asian Journal ofSocial Science 41 (2013) 243-262 247

(Drysdale and Song, 2000; Ash and Holbig, 2002; Chen, 2009). Finally, there are
a few studies that analyse the environmental and political ramifications of
China's WTO admission (Cross, 2004; Jahiel, 2006).
Another set of publications probes China's WTO compliance as a part of
more general investigations that assess China's adherence to the principles,
norms and rules of international institutions (arms control, environment,
human rights, labour and trade). These works consider inter alia how learning,
socialisation mechanisms, and dialogue/discourse have encouraged China to
act as a responsible member of such institutions, as well as to embrace a status
quo as opposed to revisionist or revolutionary stance (Hempson-Jones, 2005;
Chan, 2006; Kent, 2007). A related group of studies, prepared by economists,
political scientists and legal specialists, among others, incorporate analyses of
the China-WTO dynamic into wider-ranging explorations that look at WTO
developing world or WTO-BR1C histories, stances, and behaviours concerning
agricultural negotiations, particular WTO agreements like TRIPS, and the WTO
dispute settlement process (Narlikar and Tussie, 2004; Odell, 2006; Bird, 2006;
Crump and Maswood, 2007; Thomas and Trachtman, 2009).5
Studies of China's compliance with specific WTO accords and market sector
opening agreements represent a third group of China-WTO studies. Analysts
have probed Beijing's degree of adherence to various facets of its TRIPS com
mitments (Bender, 2006; Athanasakou, 2007; Shen, 2010). Similarly, they have
queried how Beijing is faring in meeting its WTO standards (i.e., TBT) obliga
tions (Bell and Feng, 2007; Ernst, 2011; Kwak et al., 2011). In addition, they also
have investigated how well (or not) China is opening up its automobile, insur
ance, legal, securities and telecommunication sectors to foreign firms and the
nature of the entry and operating barriers that remain (Mertha and Zeng, 2005;
Kobayashi, 2013 forthcoming). Additionally, they have delved into the topic of
China's satisfaction of its WTO transparency requirements (Chen, 2012). Yet
others have waded into much narrower issue areas, such as how China's raw
material and rare earth export restrictions comply with the spirit and letter of
the WTO (Liu and Maughan, 2012).
The number of studies looking at China within the WTO does not approach
that of the aforementioned groups, but are still enough to merit designation as
a strand of the literature. The best-known study in this vein is Margaret Pear
son's classic investigation of China's early years in Geneva where she probes
China's behaviour in various WTO decision-making bodies, China's stance
towards Taiwan and the WTO Secretariat, China's coalitional behaviour, Chi
na's policy proposals, and various other topics (Pearson, 2006). A growing body

I thank Ka Zeng for spurring me to think of this issue.

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248 /-Ai. F. Blanchard /Asian Journal ofSocial Science 41 (2013) 243-262

of works within this group also has been investigating the frequency with,
issues over, and manner in which China uses the WTO's dispute setdement
mechanism (DSM) (Harpaz, 2010; Chi, 20x2; Li, 2012).
The fifth group, which overlaps in various ways with the preceding four,
tends to have a more explicit theoretical orientation when addressing the topic
of China and the WTO. Of note, studies that are explicitly constructivist seem
to dominate. This is the case with respect to broad compliance studies of China
and international institutions. Moreover, recent studies of China and the WTO
and China's behaviours in regards to specific WTO issue areas, like the DSM
stress normative and socialisation logics (Harpaz, 2011; Mushkat and Mushkat,
2011; Wang Qingxin, 2011). There are also quite a few studies that emphasise the
significance of domestic political factors for understanding what is happening
in regards to China and the WTO. To illustrate, in his work on China and the
WTO, Wang Yong has put special emphasis on bureaucratic interests to under
stand the China-WTO dynamic (Wang Yong, 1999,2000). Andrew Mertha and
Ka Zeng (2005) point to the need to consider the interests of top leaders as
well as bureaucratic politics. Hui Feng (2006) argues we must not only acknowl
edge the salience of leaders, but also institutions, bureaucratic interests
and public opinion. There are a scant number of studies that take an explicit
realist or neoliberal-institutionalist approach to China and the WTO, though
many studies mention variables that would be familiar to those in such
theoretical camps.
A basic problem with the existing literature is that it is out-dated, with a
significant quantity of works published five or more years ago and many
works appearing ten or more years ago. Another issue is that it is too concen
trated on the topic of China's WTO accession at the expense of other topics
that are of greater contemporary relevance, such as China's stance towards
the DSM or its compliance with various WTO agreements. Yet another defi
ciency with the literature is that it fails to take a holistic and/or focused look
at China and the WTO, focusing on narrow China-WTO issues or treating the
China-WTO dynamic as but one case of other phenomenon (e.g., develop
ing country-WTO dynamics).6 A further shortcoming is that many previous
studies are descriptive. Moreover, even where they are more analytic, they
either fail to use analytical concepts and theories from international rela
tions (IR) and political science or take a "kitchen sink" approach, embrac
ing a myriad of variables and theories at the expense of parsimony. On a
related note, they often neglect to specify clear research questions. A final
problem is that little seems to link previous studies of China and the WTO,

This is a point that Zeng and Liang (2013 forthcoming) also raise in their introduction.

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 J.-M. F. Blanchard / Asian Journal of Social Science 41 (2013) 243-262 249

even when they constitute the components of an edited volume, other than an
interest in China and the WTO!

China-WTO Issues

To lay the groundwork for theorising, this section provides an abundance of

detail on China-WTO issue. It is not an exhaustive treatment, but highlights
matters most would agree are issues of major concern to policymakers and
scholars. It first looks at the issue of compliance — i.e., how well China is meet
ing the terms of its WTO agreements and fulfilling adverse WTO decisions. Fol
lowing this, it considers "China in the WTO," which encompasses sub-issues
such the extent to which China collaborates with the WTO Secretariat and
other WTO members, China's cooperativeness in WTO meetings and hearings,
and China's alignment policies (i.e., the frequency with which it allies with
developing countries). Subsequently, it discusses the issue of Beijing's role qua
WTO stakeholder — e.g., is Beijing a leader or follower, does China advance
revisionist or revolutionary proposals, or does it really on regional and bilateral
free trade agreements (FT As) at the expense of the WTO? Following this review
of "the data," the section highlights a number of associated analytical and theo
retical questions.

China's WTO Compliance

If we look at the WTO compliance issue, China's perspective is that it has done
quite well. Chinese policymakers and PRC scholars point to the dramatic drop
in average tariff rates on imports, the removal of quotas on a large number of
foreign goods, the elimination, revision, or passage of tens of thousands of
laws, regulations, and rules relating to trade, investment, and IPR, the opening
of 100 service sectors, and large inflows of FDI ("Historic Changes, Challenges
Ahead," 2011; Ding and Yu, 2on; Wang Yong, 2ona). However, many others (aca
demics, analysts, and governments) take a different perspective, finding there
are still quite a few areas where China must change its policies and practices to
conform to the spirit and letter of the WTO. To illustrate, James Bacchus (2011),
a former US trade negotiator and WTO appellate body chairman generally
observes "the PRC government is slow to implement some obligations and
refrains from implementing others," while specifically pointing to discrimina
tory government procurement practices, insufficient IPR enforcement, and
WTO non-compliant domestic innovation policies as problematic areas.
Turning to specific compliance issues beyond so-called "border barriers"
(e.g., tariffs, import quotas, and licensing procedures), five seem to stand out.

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250 J.-M. F. Blanchard / Asian Journal of Social Science 41 (2013) 243-262

The first is China's adherence to TRIPS. The second is China's fulfilment of its
TBT or "technical standards" obligations. The third is China's compliance with
its market sector opening commitments. The fourth is China's government
procurement policies. The fifth is China's satisfaction of its TRIMS obligations,
such as those forbidding mandatory technology transfers.7 Of course, there are
other issues, such as China's implementation of its trading and distribution
rights obligations, which is discussed in Chieh Huang's piece in this special
issue, the conformity of China's AD measures with WTO rules, the legalities of
Chinese subsidies, the appropriateness of certain health standards China
applies to agricultural imports, and China's adherence to its WTO transpar
ency requirements (USTR Report, 2012:28-33, 38-40, 49-52, 67, 89-93). Still,
the first five issues, which, aside from TRIMS, are discussed below, are particu
larly noteworthy as policy issues and in terms of the scale and dollar values
involved.8

The TRIPS agreement committed China to accept international standards

for the protection of IPR, such as patents, copyrights and geographical indica
tions. It also obligated China to international norms in terms of enforcing IPR.
Finally, it required China to give national treatment and most favoured nation
treatment to the nationals of other WTO members regarding the protection
and enforcement of IPR (USTR Report, 2012:96). China has made great strides
in enhancing its IPR regime. Furthermore, it has run numerous IPR educa
tional campaigns, set up IPR coordinating bodies at the highest government
levels, made IPR performance a criteria in promotions, seized increasing num
bers of counterfeited and pirated goods, increased fines, and taken measures
to ensure government offices use legal software.9 Nevertheless, foreign firms,
business associations, and governments continue to charge China has not been
aggressive as it should be in enforcing IPR. They also believe China needs to
punish more severely (with higher fines and longer jail terms) violators of other
party's IPR ("China and IP Protection," 2011; Hille, 2011; USTR Report, 2012:96
108). Their concern is not surprising given that estimated losses pertaining to
patent, copyright and trademark infringements, as well as associated IPR pro
tection costs by American companies alone in 2009 topped $US 50 billion
(Mattoo and Subramanian, 2011:10-11).

7 For a brief overview of these issues, see USTR Report, 2012:6-11.

8 In an interview, Pascal Lamy (2011:26) specifically highlighted that WTO members had raised
concerns about the first and third issues. Readers wanting more information on China and TRIMS
may consult Blanchard (2013 forthcoming).
9 See James Paradise's article in this special issue. Also relevant are Wang Qian (2011), Qiu Bo
(2011), and WangXin (2011).

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 J. -M. F. Blanchard / Asian Journal ofSocial Science 41 (2013) 243-262 251

Pursuant to the TBT Agreement, China took on diverse commitments relat

ing to standards, technical regulations and standards/technical regulations
conformity assessment procedures. Essentially, its standards, technical regula
tions, and conformity assessment procedures should be based on internation
ally relevant rules and practices, should be transparent, and should be fairly
applied (USTR Report, 2012:54).'° While China took major steps to revamp its
standards and technical regulation regime, reform relevant government bod
ies, and increase transparency and regulatory coordination, it also became
quickly apparent that China's would fall far short of the ideal. Of greatest con
cern to foreign companies and governments is Beijing's on-going effort to pro
mulgate unique national standards that gave PRC firms competitive advantages
vis-à-vis foreign ones. Chinese initiatives could be found in regards to wireless
Internet protocols, telecommunications standards, and radio frequency iden
tification tags. Foreign companies and governments also anguish about Chi
nese practices regarding accepting outside conformity assessments, giving
foreign firms access to the conformity assessment market, and the transpar
ency and fairness of its conformity assessments (Bach et al., 2006; Bell and
Feng, 2007; Beattie, 2010; Ernst, 20u; and USTR Report, 2012:56-67).
China is not a signatory to the WTO Government Procurement Agreement
(GPA), but it did say, when joining the WTO and on various occasions thereaf
ter, that it would move to open its huge US$ 1 trillion government procurement
market to foreign businesses and that prior to doing so via joining the GPA
both the central and local governments would undertake their procurements
in a transparent fashion. To date, though, foreign firms and governments
believe the Chinese government is not taking this commitment seriously. The
primary reason is that Beijing's offer regarding the GPA does not include gov
ernment procurement at the regional and sub-regional level or procurement of
goods and services by SOEs. Moreover, in their view, Beijing appears to be in
no hurry to satisfy the requirements of outside parties, though it persists in try
ing to negotiate a satisfactory compromise with the US, EU and other actors."
Business and government statements, media reports, and academic studies
raise concerns about the pace and extent to which Beijing is liberalising its
service sectors per its WTO obligations, though they also recognise substantial

10 China also agreed to give foreign service providers certain rights in regards to offering con
formity assessment services and to restructure a mix of standards, technical regulations, and con
formity assessment laws, fees and so on.
11 For background and information, see Ping (2009); Ding (2011); "China's Role in the WTO"
(2011:26); "Europe Says China's Latest Bid to Join Government Procurement Agreement 'Highly
Disappointing,' " (2013): and USTR Report (2012:71-75).

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252 7--Ai. F. Blanchard / Asian Joumalof Social Science 41 (2013) 243-262

progress (USTR Report, 2012:108). In regards to the banking and securities sec
tors, analysts and commentators highlight issues relating to limits on the own
ership stakes that foreign banks and security firms are allowed to take, the
operating restrictions they face (particularly in regards to licensing, the launch
ing of new business lines like electronic payment cards, or experiential and
working capital requirements), and the extent to which the government regu
lates foreign banks and security firms (Rabinovitch, 2011; Mattoo and Subrama
nian, 2011:12; USTR Report, 2012:109-111, 115-116). China has also imposed a
number of barriers on telecommunications firms, hindering them from provid
ing basic services and certain kinds of value-added services (e.g., voice mail),
forcing them to partner with SOEs, and imposing very high capital require
ments (Chang et at., 2005; USTR Report, 2012:117-118; and Kobayashi, 2013 forth
coming). Foreign insurance companies, legal service providers, construction
firms, express delivery services, and maritime service providers also report
encountering WTO non-compliant licensing or approval processes, geographic
and business operating restrictions, and ownership share and partner selec
tion barriers (USTR Report, 2012:112-114,116-117,118-120,120-122).

China in the WTO

As put by Robert Lawrence (2006:3-4), a distinguished economist with the

Institute for International Economics, when China joined the WTO there were
worries that:

China would not participate constructively in the WTO. It would throw its weight
around, try quickly to obtain disproportionate influence and use its influence to funda
mentally change the WTO system. China was also seen as a potentially powerful addi
tion to the ranks of developing countries, and many in the developed world worried
that it would seek to limit the obligations required of developing countries.

Research by various scholars and interviews with various players in Geneva,

home of the WTO, seem to indicate that China is participating actively and
acting as others do. It uses standard WTO mechanisms like the DSM and "writ
ten submissions," and appears to respect WTO rules and procedures as much
as any other WTO member. Beyond this, it does not seem to be fashioning any
type of rigid coalition with developing countries, but rather approaches issues
on a case-by-case basis, which means that it sometimes finds itself on the side
of developed countries rather than developing countries (Pearson, 2006:242
275; Lawrence, 2006:10-13; Scott and Wilkinson, 2011:12-13). China, though, is
not that cooperative in regards to the Transitional Review Mechanism (e.g.,
failing to respond in writing) or matters pertaining to Taiwan, though even in

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 J.-M. F. Blanchard / Asian Journal of Social Science 41 (2013) 243-262 253

this latter case there are instances where the PRC acts in a more pragmatic
fashion than others.12

China's Role qua WTO Stakeholder

The Doha Development Round (DDR) is indisputably on "life support" While

no capitals are ready to proclaim its death, developing countries remain unwill
ing to meet developed country expectations regarding opening their manu
facturing sectors, while developed countries remain quite unwilling to satisfy
developing country desires regarding the opening of their agricultural sec
tors (Beattie, 2011; "China's Role in the WTO," 2011:27). The key question for us
here is how has Beijing behaved during the DDR. Simply put, studies indicate
that there is relatively litde of note. It has been a leader in certain cases, but not
others. Neither has it aimed to rewrite the rules of the global trade regime. Last,
but not least, it has not been an obstructionist, but has been a flexible and posi
tive player in the DDR (Pearson, 2006; Lim and Wang, 2010; Scott and Wilkin
son, 2011:13-17). Another question is the effect of Chinese free trade agreement
(FTA) initiatives on the multilateral trading order (Lawrence, 2006:4). It is true
that China has been active in negotiating FT As, such as the China-Association
of Southeast Asian Nations FTA (concluded) and a China-Australia FTA (on
going).13 But, for now, the evidence is that China's FTAs encourage further trade
liberalisation, are not producing a "Fortress Asia," and are not creating a sys
tem centred around China (Lawrence, 2006:23-26). Moreover, China is far less
active than others in pursuing FTAs (Mattoo and Subramanian, 2011:14-15).

The preceding facts raise a plethora of interesting research questions. With

respect to compliance, under what circumstances is China more likely to sat
isfy all or parts of its WTO obligations? What explains variation in compliance
across various WTO accords, such as China's TRIPS, TBT and service sector
opening agreements or within particular agreements, such as TRIMS?14 Why
has China been collaborative in working with the WTO Secretariat and other
WTO members, albeit much less so regarding the transitional review mecha
nism and Taiwan? Why has Beijing only occasionally allied with developing
countries despite its frequent professions of being a developing country? Under
what conditions has China acted as a leader versus a follower in the WTO?

12 On the former, see Lawrence (2006:13-14). On the latter, see Sigrid Winkler's contribution in
this volume.
13 For a list of concluded FTAs, as well as FTAs under negotiation and consideration, see PRC
Ministry of Commerce, "China FTA Network," http://fta.mofcom.gov.cn/english/fta_qianshu
.shtml.
14 Elsewhere 1 explain variation within an agreement. See Blanchard (2013 forthcoming).

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254 7--Ai. F. Blanchard / Asian Journal of Social Science 41 (2013) 243-262

What has led China to shy away from attempting to rewrite the rules of the
world's most important trade regime despite its rising weight in the global sys
tem? Why has China avoided building an extensive network of bilateral and
regional FT As that serve as substantive alternatives to the WTO?
The aforementioned analytical questions and other China-WTO facts raise a
number of fascinating theoretical questions, too. For example, when do politi
cal considerations (realist logics) predominate over economic ones (liberal
logics) in the ways that China acts as a WTO member? Furthermore, what
effect has the WTO qua international institution (as legal, normative and nego
tiating structure) had on Chinese interests, strategies and WTO behaviours?
This question is of great interests to constructivists and neoliberal institution
alists. Are third-image (international) or second- or first-image domestic vari
ables (e.g., leader perceptions, interest groups or public opinion) more useful
in providing answers to the enumerated analytical questions? Do socialisa
tion/learning or national interest perspectives offer richer insights into the
dynamics of China as a WTO member?15 What explains China's impact on
the WTO?

Article Summaries

The second article in this collection, byJean-Marc F. Blanchard, probes China's

admission to the WTO. Blanchard argues the topic of China's WTO accession
warrants further analysis because much of the extant literature is divorced
from the 1R literature on IGOs, Chinese foreign policy, or both. Moreover, he
observes that while past analyses have considered external and internal factors
shaping China's stance towards joining the WTO, they have rarely gone beyond
this to probing when particular factors mattered more than others. He argues,
too, that research that considers domestic factors often treated them generi
cally or fails to detail the path through which they affected issue identification,
policy construction, and implementation. Blanchard endeavours to address
these diverse lacunas by conducting a theoretically informed study of China's
WTO accession. While traditional interest-, power- and idea-based approaches
to IGOs capture various aspects of the story of China's effort to join the WTO,
they also miss other critical features. In Blanchard's view, a leader-oriented
cost-benefit model best explains China's continued quest to become a WTO
member, its aggressive pursuit of accession in the second half of the 1990s, and
its willingness to tolerate very demanding WTO entry terms.

15 Authors taking the former perspective are Kent (2007) and Wang Qingxin (2011). An author
taking the latter perspective is Zhang (2003).

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 -Ai. F. Blanchard/Asian Journal of Social Science 41 (2013) 243-262 255

In the third article, Sigrid Winkler traces the interactions between Taiwan
and China in the WTO in an environment of continuing Chinese concerns
about Taiwan's sovereignty and the application of the "one China" principle.
Her analysis examines both parties' simultaneous admission negotiations,
their sovereignty-related disputes after entry, and the issue of Taiwan's acces
sion to the GPA. Winkler uses a cost-benefit framework to explain the PRC
Taiwan dynamic within the WTO framework. For example, in regards to the
issue of Taiwan's WTO accession, Winkler shows that since mainland China
could have only stopped a Taiwanese accession by letting go of the opportu
nity to become a WTO member itself, it accepted Taiwan's membership since
the costs of obstructionism (no membership) were outweighed by the benefits
(accession). She adds that once both Taiwan and China had entered the WTO,
China's ability to exert pressure on the organisation grew so it became able to
influence decisions about Taiwan's organisational status at much lower cost
Therefore, it became more aggressive.
James Paradise's "China's 'Innovation Society' Makeover" tackles the famil
iar issue of China and TRIPs. He reports that China has taken many actions to
improve the protection and enforcement of IPR since it acceded to the WTO in
2001. Per Paradise, these actions include revising and amending IP laws, creat
ing special IP courts, carrying out special government enforcement campaigns
and establishing IP-related education programmes. The driving force behind
these activities has been the cost-benefit calculations of the Chinese central
government, whose leaders have bought into the idea that a strong IP regime
can promote economic development, provided that it is tailored to local cir
cumstances, and are now attempting to implement China's plan to become a
"knowledge-intensive" and "innovation-oriented" society. Paradise's article
also highlights some of the factors that have inhibited the creation of a more
mature IPR regime in China, including cultural factors, the fragmentation of
political authority along horizontal and vertical lines, and China's level of
development. And finally, Paradise's study describes some of the conflicts that
are emerging between China and its major trading partners because of China's
use of IP-related industrial policies to develop "indigenous technology."
"Public Morals with Chinese Characteristics" (Chieh Huang) examines Chi
na's compliance with WTO law in the field of publications control. The issue of
publications control brings to the fore the debate between "liberalisation" and
"state control" within the Chinese leadership and within WTO circles. Huang's
article describes these contesting and historically shifting ideas in the con
text of a recent landmark WTO case relating to China's publications control
regime. As Huang points out, the background to the dispute was China mainte
nance of a state import monopoly for cultural products despite its accession

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256 J.-M. F. Blanchard / Asian Journal of Social Science 41 (2013) 243-262

commitments to liberalise trading rights. The US eventually brought a WTO

case against China over the matter, with the WTO's Dispute Settlement Body
holding that Chinese practices were inconsistent with WTO rules and that
China's claim that its censorship system was necessary to guard public mor
als was untenable. Still, China resisted liberalising the sector. Huang argues a
cost-benefit analysis of China's top Communist Party (CCP) leadership partly
explains China's stance towards a sector perceived so critical to the CCP's per
ceived survival. However, she argues we also need to use idea and socialisation
centred approaches to understand fully what transpired.
In her article ("High Stakes"), Ka Zeng studies China's trade disputes under
the WTO. Her analysis reveals that China's WTO disputes tend to be domi
nated by cases involving ADs and CVDs. In her view, the disproportionate
share of such trade remedy cases in China's universe of WTO cases needs to be
viewed in light of the fact that China has become the leading target of such
cases worldwide in the past decades. Moreover, China's pattern of WTO initia
tion is explicable within a leader cost-benefit analysis framework, which would
lead us to expect Chinese leaders will use the WTO DSM to deal with issues of
critical concern to domestic constituencies, such as the opening of foreign
markets or gaining protection against third party trade measures. She further
argues that the significant expansion of bilateral trade relations in the past
decades has provided opportunities for Chinese leaders to threaten retaliation
against anti-protectionist groups in other countries. Overall, China's WTO
trade disputes increasingly reflect a distinctive political logic whereby domes
tic political considerations not only figure prominently in the decision to
launch WTO disputes, but also frequently influence the way the dispute is
played out either within or outside of the WTO framework.
In "China and the WTO after New Imperialism," Josef Gregory Mahoney
adopts a political theory approach to illuminate the past, present, and future of
China and the WTO. He writes that within the broader context of reform and
opening up since 1978, many have read China's WTO accession as an indicator
of a non-Marxist ideology and Party at work in Beijing. Moreover, he notes that
some see Beijing's willingness to finance the frayed edges of the global capital
ist system amid on-going crises as further evidence of the same. He argues,
though, that a different reading of history is needed. He contends that China's
membership in the WTO and indeed, its intense participation and integration
with the global economy represents an admittedly significant tactical adjust
ment within a broader strategic vision that retains key aspects consistent with
the Marxist, if not Maoist, project. In many respects, it can be argued that the
Party has often weighed potential costs and benefits with respect to policy
making, and this is clearly the case too with China's decision to pursue and

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 /-Ai F. Blanchard / Asian Journal ofSocial Science 41 (2013) 243-262 257

acquire WTO membership. His piece concludes by inquiring about the posi
tive and negative aspects of China's WTO membership in theoretical terms,
and suggests how China's membership might or perhaps should be developed
in the future.

An earlier section identified a number of research questions relating to

China and the WTO — e.g., under what circumstances is China more likely to
satisfy all or part of its WTO obligations, such as trading rights or TRIPS? Why
has China been collaborative in working with the WTO Secretariat and other
WTO members, albeit much less so regarding the transitional review mecha
nism and Taiwan? Why has China been a status quo as opposed to a revisionist
or revolutionary state in the WTO as shown by its use of the DSM? As shown by
the diverse contributions to this volume, a cost-benefit analytical framework
can meaningfully illuminate much of what we see in the China-WTO dynamic.
The articles in this special issue also make clear that we must pay attention to
political variables (particularly leader interests) to understand China's behav
iour in this economic IGO. Beyond this, the various pieces included herein do
not lend support to a constructivist take on China and the WTO with learning,
normative and socialisation mechanisms seeming to have little import.

Conclusion and Forecasts

This article has sought to provide a foundation for this special issue. It sum
marises and critiques the literature, which falls into five groups. Furthermore,
it identifies a number of research issues pertaining to China and the WTO,
such as China's performance in regards to its WTO commitments, China's
behaviour in Geneva in regards to forming alliances with developing countries,
and China's record as a WTO stakeholder with respect to leading or following
in WTO negotiating rounds. As well, it summarises the articles in this volume,
highlighting some of the broad insights they offer about the research and theo
retical questions enumerated at the end of the third section. This section
addresses the main contributions of this special issue, focusing on their policy
and theoretical ramifications. It also raises a number of limitations as well as
future research directions and offers some concluding remarks.
Aside from expanding our knowledge of China-WTO issues, updating the
literature, and supplying an analytically-oriented work specifically focused on
China and the WTO, this special issue's major contribution is to show that
cost-benefit lenses can shed significant light on China's WTO accession, par
ticipation and future heading. This mirrors the position of others like Robert
Lawrence, C. L. Lim, Jiang Yu Wang, Aaditya Mattoo and Arvind Subramanian
who have shied away from embracing arguments emphasising ideology,

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258 J.-M. F. Blanchard / Asian Journal of Social Science 41 (2 ois) 243-262

Chinese culture, socialisation or role conceptions (e.g., the duties of an eco

nomic "leader") and, instead, favoured arguments highlighting what China
gains and loses.16 This special issue also shows that a cost-benefit model applies
even where the sensitive issue of Taiwan is involved. For policy makers, this
special issue has a number of important implications. One is that the best route
to influencing Beijing's behaviours is to shape the cost/benefit calculation that
it confronts. Second, there is no current basis for policy makers fretting about
China undermining the WTO.
A shortcoming of this work is that it does not yield any definitive conclu
sions about whose cost/benefit calculations matter, though the two pieces by
Blanchard and Zeng indicate that the calculus of top leaders is key. Yet, many
scholars have shown that cost/benefit calculations at the sub-national, minis
terial and mass levels can be salient (Scott and Wilkinson, 2011). Still, this seems
to be the case only to the extent that top Chinese leaders let such consider
ations matter! This volume also does not indicate which specific costs and ben
efits matter. Nevertheless, the contributions by Blanchard, Huang, and Zeng all
seem to indicate that political survival/power considerations are central.17 This
is likely to be true even at the local level where leaders directed to make WTO
related changes to their policies and practices must worry about disrupting the
matrix of relations that sustains their power (Scott and Wilkinson, 2011:18). Yet,
another gap is that this volume does not consider in-depth how China affects
the WTO in regards to issues such as the WTO negotiating agenda, the DSM
agenda and small-group decision-making dynamics (Scott and Wilkinson,
2011:19).
As we look forward to the next decade of China's membership in the WTO,
questions are arising about its future direction. This is not just a function of
China's incomplete compliance with various WTO agreements, but also its
need to fulfil a slew of adverse WTO rulings relating to issues such as its limita
tions on raw material exports and electronic payment cards, as well as the
existence of trends that are buffeting long-favourable Chinese views about the
WTO (Chaffin and Beattie, 2012; Politi, 2012). One is the proliferation of WTO

16 Lawrence writes (2006:14), China's participation in the WTO "is constructive because the
WTO is a very attractive institution for China that clearly serves its interests." Lim and Wang
(2010:1319-1327) assess that China's stance in the DDR is driven by calculations about the benefits
it receives and the costs it will incur from further trade liberalisation, the costs and benefits asso
ciated with various alternatives such as increased usage of trade retaliation, and the costs and
benefits associated with certain relationships vis-à-vis developing countries. Mattoo and Subra
manian (2011:17) see cost-benefit calculations as influencing China's participation in any future
multilateral negotiating round.
17 Similar thinking is embodied in a recent article byjohn Lee (2012:1-2) who writes China will
not accept WTO required changes since its goal is to protect, at a minimum, and, at the maxi
mum, facilitate the growth of SOEs because the dominance of SOEs helps the CCP to dominate
the economy and the political system.

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 J.-M. F. Blanchard / Asian Journal of Social Science 41 (2013) 243-262 259

alternatives, such as FTAs and ADs/CVDs. A second is the stagnation of the

DDR. A third is China's desire to restructure global economic institutions so
they are more reflective of the contemporary distribution of power and devel
oping country interests. A fourth is the post-2008 global financial crisis, which
has cast doubt on China's export-led development strategy. A fifth is a belief
that WTO rules, such as those embodied in TRIPS, are hindering, rather than
helping China (Lim and Wang, 2010:1319-1327; Beattie, 2011; Wang Yong
20iib:32-33). Yet, we should not conclude China is ready to abandon the WTO.
As this special issue demonstrates, China's next ten years in the WTO will
entail a cost-benefit calculation. Given China's interests "in an open global
trading system, the country's support of the WTO will likely remain strong in
the next decade" (Wang Yong, 20ub:3i).18

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