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  • China: home of shiny high-speed trains,

  • and gleaming skyscrapers,

  • and...

  • also, really poor people.

  • So is China a rich developed country or still developing country

  • I mean potato potato, does it even matter what you call it?

  • Well as it turns out, yes!

  • Welcome back to China Uncensored. I'm Chris Chappell

  • International trade what a beautiful thing!

  • Thanks to it. We enjoy

  • exotic products like bananas or coffee or Raisinets.

  • Or everyday low prices at Walmart

  • as long as you don't think too hard about where those low prices come from

  • But behind the scenes

  • international trade is a competitive game.

  • Think of it like mixed martial arts

  • You know, everyone has their different styles of trading.

  • This guy definitely seems like a protectionist.

  • And though it may not always seem like it,

  • there are rules you have to follow

  • like no biting or eye gouging.

  • Who makes the rules?

  • Well in MMA

  • it's the UFC.

  • And if you break the rules in the ring, there are consequences.

  • In international trade, there's no UFC, but there is the WTO or the World Trade Organization.

  • Like an octagon where bureaucrats in suits thrash out their differences on trade issues

  • Unfortunately. they actually do it seated at conference tables and not in the Octagon.

  • I would pay to watch that, though.

  • But settling disputes about whether countries are playing by the rules isn't the only thing the WTO does.

  • Its main function is to ensure that trade flows as smoothly predictably and freely as possible.

  • And besides settling disputes and reducing trade tensions it also helps poor countries develop,

  • and gives the weaker countries a stronger voice

  • That means weaker or developing countries get preferential treatment.

  • Imagine a UFC match where the weaker opponent gets all kinds of handicaps.

  • For example,

  • He's allowed to occasionally eye gouge you.

  • President Trump,

  • who's an expert at complaining about things on Twitter, put it this way:

  • China is a great economic power?

  • but it's considered a developing nation by the WTO.

  • They therefore get tremendous perks and advantages.

  • That's essentially true.

  • According to the WTO

  • there are special provisions

  • Which give developing countries special rights.

  • And for the Chinese government being able to claim

  • developing country status has been a pretty sweet deal.

  • Like in the area of government procurement.

  • When the Chinese government buys stuff it's allowed to

  • discriminate against foreign companies by favoring higher priced and lower quality

  • domestic providers over lower priced and higher quality foreign providers.

  • The US government is not allowed to do that and

  • developed countries like the US are supposed to give developing countries special breaks

  • like setting low tariffs on goods from developing countries.

  • But developing countries can set high tariffs on goods from developed countries.

  • That means for example that US companies have a harder time selling their stuff in China

  • The WTO also encourages developed countries like the U.S.

  • to share technology with developing countries.

  • What's called technology transfer.

  • That doesn't mean China is allowed to just steal intellectual property.

  • But it does mean the WTO often turns a blind eye to it.

  • So basically when China steps into the Octagon against the US or Europe the WTO refs

  • Let China wear body armor and they look the other way when China gets in one of those eye gouges.

  • Some of these WTO advantages really do make sense for developing countries like Jamaica.

  • It would be unfair if big foreign companies came in and just totally dominate that Jamaican economy.

  • To make it ought to be given the time to develop its own industries like sugar and coffee and Bob Marley.

  • But China's economy is a thousand times bigger.

  • In fact, China's economy is larger than the economy of every single developed country except the US

  • So does it still make sense to treat China as a developing country?

  • Well guess what: it's complicated.

  • When China started applying to join the WTO back in 1986, it was poor.

  • the average gross domestic product or GDP was about

  • $700 per person per year

  • Compare that to nineteen thousand per person for the U.S. at the time.

  • But that's all changed.

  • According to the International Monetary Fund

  • China's per capita GDP is now 25 times bigger

  • So China's developed now, right?

  • Well, not exactly...

  • Jeremy Wallace a professor at Cornell University says China is complicated.

  • In many ways China is both a developed and a developing country.

  • The vast majority of Chinese people are poor and yet because China is such a huge country

  • it is still the case that there are a huge number of rich people in China.

  • In fact, there are kind of more rich people in China than there are

  • people in the United Kingdom

  • Bjorn Conrad vice president of the Mercator Institute for China studies breaks it down like this:

  • It's a...

  • developed country if you look at number of Starbucks or

  • literacy rate.

  • It's a developing country if you look at the numbers of doctors per capita or

  • percentage of the workforce that works in agriculture

  • Okay, China, has lots of Starbucks, but not enough doctors.

  • So is China developing or developed?

  • Since the WTO gives certain advantages only to developing countries,

  • surely the WTO has a strict set of criteria to make this distinction, right?

  • Turns out, nope, the WTO has no official definition

  • Members announce for themselves whether they are developed or developing countries.

  • Which is like letting each UFC fighter decide for themselves whether they're allowed to eye gouge their opponent.

  • And which do you think that Chinese Communist Party chose?

  • Since it joined the WTO in 2001, it's been calling China a developing nation, and it's gotten all the cool perks.

  • China was the world's fifth biggest economy back then but within a decade it has pulled into second place.

  • Now the US and Europe are both calling, China out,

  • Arguing it's a big enough player that it has to start playing by the rules of developed countries

  • But the Chinese authorities are pretty sure that China is still developing

  • So what do you think about the preferential treatment at the World Trade Organization?

  • Is it time China got a status upgrade?

  • Leave your comments below.

  • Once again, I'm Chris Chappell. See you next time

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  • Of course you do!

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China: home of shiny high-speed trains,

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Is China Still a Developing Country?

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    张振 posted on 2018/05/15
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