According to multiple US media reports, on the 27th local time, the US House of Representatives passed a draft legislation aimed at depriving China of its “developing country” status with a vote of 415 in favor and 0 against.
The US “Capitol Hill” reported that the draft legislation titled “The People’s Republic of China is not a developing country” requires the US Secretary of State to commit to depriving China of “developing country” status in international organizations in which the United States participates. status, and modify China’s relevant status to “upper-middle-income country”, “high-income country” or “developed country”, and at the same time oppose the continued recognition of China as a “developing country” in any international agreements and treaties. The draft also requires the U.S. Secretary of State to develop a mechanism to achieve this goal.
Not only that, the draft also requires senior U.S. diplomats to prevent China from receiving any preferential treatment in international organizations by virtue of its status as a “developing country”.
01Intended to cancel China’sseries of preferential treatment in the international trade mechanism
It is reported that the bill is called the “Bill to Terminate China’s Developing Country Status”, and its core content is to deny China’s developing country status and cancel China’s preferential treatment in the international trade mechanism.
According to WTO regulations, countries with developing country status can enjoy a series of preferential trade policies, such as tariff reductions and exemptions, extended consultation periods, etc. However, the United States believes that China has become the world’s largest exporter and second-largest economy and no longer meets the standards of a developing country and should be deprived of these preferential treatments.
As early as February 2020, the Office of the United States Trade Representative (USTR) issued an announcement in the Federal Register announcing the cancellation of preferential treatment for developing countries in the WTO for 25 economies, including China and Hong Kong.
According to the WTO agreement, developing countries enjoy “Special and Differential treatment (S&DT)” in international trade. Developing country members can enjoy more preferential treatment in terms of tariff concessions and weakening of non-tariff barriers. treatment.
For specific reasons, let’s listen to what the US congressman who proposed this bill has to say. A US Republican congressman declared that China and the United States are both the world’s two largest economies. Since the United States is among the developed countries, why has China been shrunk to the ranks of developing countries? In order to allow other developing countries to receive more and better help, China should join the ranks of developed countries.
It is worth noting that the US congressman only mentioned China’s status as the second largest economy, but did not say a word that China still has the problem of unbalanced and inadequate development. In 2021, China’s per capita GDP It ranks only 60th in the world. According to data from the China Youth Network, my country’s per capita GDP in 2022 will be approximately 85,000 yuan, equivalent to approximately 12,000 US dollars, which does not meet the “developed country” standard of US$20,000 per capita GDP recognized by some global institutions.
So,Although China ranks second in the world in terms of economic aggregate, China is not yet among the developed countries in terms of per capita GDP.
However, the United States insists on bringing China into the ranks of developed countries, which is what we mentioned earlier and wants to deprive China of the preferential treatment it received when it was a developing country. So what kind of preferential treatment do developing countries have that makes the United States feel sorry for them?
First, the United Nations will grant preferential tariffs on loans to developing countries. When you borrow from the World Bank, you will have the benefit of low interest or even no interest. At the same time, developing countries will also receive preferential tariffs when selling goods to other countries.
Second, developing countries can set up trade protection policies in import and export foreign trade and can be partially open to other countries, while developed countries need to be fully open to other countries.
The third is carbon emission rights. Developed countries need to reduce emissions by 85% before 2035, while developing countries have an extra 10 years of grace on carbon emissions and a 5% reduction in emissions. These differences are crucial for developing countries to improve their national strength.
The U.S.’s suspension of preferential treatment to China’s developing countries indicates that it may no longer apply “special and differential treatment” to its future trade with China and follow the standards of developed countries. This also means that China will Facing a more complex environment in trade with the United States.
02Have requested the WTO several times to cancel China’sdeveloping country status
There are two main reasons why U.S. congressmen proposed this motion, firstly, it is believed that China participated in these international organizations as a developing country and received some preferential treatment, and gained an advantage over the United States in international competition through “unfair means”; secondly, It is believed that China is already the world’s second largest economy, with a per capita gross national income (GNI) exceeding US$10,000. It is about to reach the level of a high-income country defined by the World Bank and can no longer be classified as a developing country.
Since the beginning of 2019, U.S. trade negotiators have repeatedly requested the WTO to cancel China’s status as a developing country, in an attempt to prohibit the preferential treatment China has received by virtue of its status as a developing country.
In fact, the WTO has never defined what kind of country is a developing country. The status of a country joining the WTO is first of all a sovereign country’s self-positioning and choice, and then obtained through a series of negotiations with other member states.
China’s accession to the WTO as a developing country was not only China’s accurate positioning based on its own national conditions more than 20 years ago, but also what all parties in the negotiations agreed to at the time. After more than 20 years of development, China’s economic aggregate and per capita GDP have increased tremendously. However, China still has hundreds of millions of people who have just escaped poverty and are still in the stage of development, which is similar to other developing countries. A little more.
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