Does China practice unfair trade practices?
The World Trade Organization Commerce Minister claimed China’s economic boom was built on "unfair trade practices", hidden subsidies, and distorted labour models, ignored by much of the world since Beijing joined the WTO in 2001.
What is unfair trade practices?
Unfair trade practices simply refer to the use of various deceptive, fraudulent, or unethical methods to obtain business.
This is a table that shows the trade balance of the top five biggest economies based on GDP
United States
China
Japan
Germany
India
From the table chaina has a massive trade surplus of close to $1 Trillion, In 2024, Chinese imports of goods amounted to approximately 2.59 trillion U.S. dollars, whereas total exports added up to about 3.58 trillion U.S. dollars.
Economists believe China's huge surplus is due to
- State backed subsidies: for example from 2010 to 2012 Government subsidized 40-60% of the cost of purchasing electronic vehicles and between 2001 to 2006 the Chinese Government provided $52 billion in subsidies to its steel producers.
Currency manipulation: for example China's yuan hit its lowest against the dollar on Thursday amid an intensifying China-U.S. trade war.
Market restrictions: for example foreign firms were banned from owning more than 50% of companies in sectors like telecoms, media and finance. And also have complicated regulatory requirements.
And also from 2014 till date chaina has had a surplus trade balance.
Being an economy heavily reliant on export, China ranked first among countries with the highest trade surplus, followed by Germany and Russia.