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  • Promises:

  • Easy to make.

  • And for Chinese leaders,

  • even easier to break.

  • Here are 5 Trade Promises China Has Broken.

  • Welcome back to China Uncensored.

  • I'm Chris Chappell.

  • We all know there's a trade war between China and the US.

  • But we didn't start the fire.

  • It was always burning

  • since the World Trade Organization let China join.

  • That was back in 2001.

  • And it came after certain US officials

  • had lobbied for years to let China into the WTO club.

  • “I strongly support China's admission into the World Trade Organization.

  • The World Trade Organizationor WTO for short

  • is an international group created in 1995

  • to help governments negotiate trade deals.

  • The idea was to make international trade as free, and easy,

  • and non-violent as possible.

  • Unlike the tragic Molasses War of 1882.

  • That was a sticky situation.

  • Anyway, US corporations had been lobbying President Clinton

  • to help China join the WTO,

  • because they were confident that if only they could

  • get access to the China market,

  • they would make so much money!

  • I mean, er, help bring, um, democracy to China.

  • Yeah, that's the reason!

  • The more we bring China into the world,

  • the more the world will bring freedom to China.”

  • That worked out well...for the Chinese regime.

  • Entering the WTO in 2001

  • gave China access to other countries' markets,

  • and spurred China's super-fast economic growth.

  • But there was supposed to be a catch to joining the WTO.

  • China had to agree to the rules outlined in this 103-page document

  • calledAccession of the People's Republic of China”.

  • Also known asThe Protocol.”

  • Well that sounds totally normal and not weird at all.

  • Fast forward 18 years, and the world

  • has been doing a lot of trade with China,

  • but the Chinese regime has still not complied

  • with quite a number of their Protocol commitments.

  • Which is a nice way of saying, they've been cheating.

  • So in today's episode,

  • we'll focus on 5 trade promises that China made

  • and broke.

  • Broken Promise Number 5:

  • Ending Price Controls

  • When China joined the WTO,

  • they promised to end price controls.

  • That is, toallow prices for traded goods and services

  • in every sector to be determined by market forces.”

  • But guess what?

  • In a 2018 report to congress on China's WTO compliance,

  • the United States Trade representative said China's

  • government and the Party continue to control

  • or otherwise influence the prices of key factors of production.”

  • Yeah, they're not ending price controls.

  • There are a number of products and services

  • currently subject to government-set prices

  • including pharmaceuticals, tobacco,

  • natural gas and telecommunications services.

  • Which means foreign companies

  • find it hard to compete in those industries,

  • plus a lot of related industries.

  • For example, price controls on fuel

  • mean that energy is cheaper in China,

  • which makes it cheaper to manufacture a lot of products.

  • All these things add up to mean that goods

  • are cheaper to make in China

  • than in other developing countries

  • where wages are also low.

  • Broken Promise Number 4:

  • Ending Subsidies

  • The Chinese regime props up a lot of industries

  • through grants and loans from state-owned banks.

  • And in some cases,

  • local governments also offer land rights at super low prices,

  • to make it cheaper for certain industries to get started.

  • Andlike price controls

  • these subsidies have enabled a lot of Chinese companies

  • to sell products at below market rates.

  • Pervasive involvement of the Chinese government

  • has resulted in numerous subsidies

  • being provided to Chinese companies

  • leading to artificially low-priced manufactured goods,”

  • say the authors of a study called

  • China's Long Road to Market Economy Status.

  • Of course, the Chinese regime

  • has promised to remove these state subsidies.

  • But the US Trade representative has identified

  • hundreds of prohibited subsidies

  • in a wide range of manufacturing sectors.”

  • These subsidies contribute to the serious excess capacity problems

  • that plague industries like steel, aluminum,

  • solar panels and fishing

  • and devastate global markets and foreign competitors.”

  • Why do you think your made-in-China solar panels are so cheap?

  • On top of that, China promised to disclose its subsidies,

  • but has reneged on that promise too,

  • by hiding the subsidies being provided on a local level.

  • China continues to shield

  • massive sub-central government subsidies

  • from the scrutiny of WTO members.”

  • I get it.

  • If you're going to give out illegal subsidies,

  • you really should try to cover your tracks.

  • Which leads us to...

  • Broken Promise Number 3:

  • Transparency

  • The Chinese Communist Party has never been

  • particularly good about being transparent.

  • I mean, just GoogleChina cover up

  • and you'll see what I mean.

  • And when it comes to trade,

  • China disregards many of its WTO transparency obligations,

  • which places its trading partners at a disadvantage

  • and often serves as a cloak for China to conceal

  • unfair trade policies and practices from scrutiny.”

  • For example, China promised to make available

  • to its WTO trading partners

  • all trade-related laws and regulations

  • before they're implemented or enforced.

  • They don't do that.

  • China also promised to provide translations

  • of all of its trade-related laws into English,

  • French or Spanish.

  • They don't do that, either.

  • In fact, the Chinese government never even set up

  • an agency or program to undertake these translations,

  • which, again,

  • are a basic requirement for being part of the WTO.

  • But I get it.

  • Lotta laws, lotsa hassle,

  • all that translation and notification ahead of time.

  • Maybe you just have to request them, right?

  • Nope.

  • Not only does China have a poor record

  • of adhering to its notification obligations,”

  • says the US Trade Representative,

  • but it also fails to cooperate when other members

  • make requests for information.”

  • China's regulatory system is so opaque, in fact,

  • that foreign companies and governments

  • can't fully understand legal requirements

  • in some areas of the Chinese economy.

  • This obviously puts foreign companies at a huge disadvantage.

  • It means they can be accused of breaking laws

  • they didn't know existed

  • and had almost no way of finding out about

  • because Chinese officials basically kept them opaque.

  • But even if foreign companies did have a full understanding

  • of China's laws and regulations,

  • that still might not be of much use.

  • And that's because of...

  • Broken Promise Number 2:

  • A Fair and Impartial Justice System

  • Before entering the WTO,

  • China committed to broad legal reforms that included transparency,

  • equal treatment under the law,

  • and a fair judicial review process.

  • If these reforms were implemented,

  • they would strengthen the rule of law and make it easier

  • for foreign companies to do business in China.

  • But, surprise!

  • That hasn't happened.

  • A study done for a U.S. industry association

  • anonymously interviewed companies doing business in China.

  • Off the record, these companies reported time and again

  • that officials took advantage of China's utter lack

  • of any type of foreign investment approval process

  • to block foreign investment.

  • Or officials force the foreign company

  • to take on a Chinese joint venture partner,