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China’s State-Directed Economy and the World Trading System

  • Luyao Che
Chapter

Abstract

This chapter argues that the existing multilateral trading system, which is underpinned by WTO rules, has limited ability to adapt to the recent development of the state-directed economic model, as it has not contemplated the newly emerging market-state relationship in China. The chapter first puts forward a point that various WTO rules have been introduced in order to discipline two types of economies, namely command economies, wherein the state regulates every economic actor and leaves no room for market mechanisms to function, and market economies, wherein the state fulfils a single role as a regulator, which is secondary and supplementary to the market. Then the chapter examines the challenges imposed by the rise of contemporary state-directed economies to the multilateral trading system, using China’s recent involvement in the areas of anti-dumping and countervailing measures against subsidized trade as case-studies. The chapter argues that a certain difficulty exists in applying the relevant instruments to the situations in which the state is alleged to distort free trade by performing its role as a competitor or a planner, rather than as a regulator, because when these instruments took shape, the multilateral trading system was only conceived of in one way for the state to influence the economy, which is through exercising its regulatory authority.

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Copyright information

© Springer Nature Singapore Pte Ltd. 2019

Authors and Affiliations

  • Luyao Che
    • 1
  1. 1.China University of Political Science and LawBeijingChina

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