Renascence of the Red Dragon: A Critique of the EU and US Response to China’s Transition to a Market Economy under the WTO

Abstract

China’s Protocol of Accession to the WTO in its subparagraph 15(a)(ii) allowed the WTO Members to treat China as a non-market economy; however, post December 11, 2016, the situation has changed as the concerned subparagraph has expired, and thereby has created a situation of uncertainty in relation to China’s market economy status. This article will first shed light on topics such as non-market economies (NMEs) and the legal rules concerning them under the WTO regime. Secondly, it will focus on the history and evolution of the non-market economy methodologies under the national regimes of the European Union and the United States. Lastly, China’s main trading partners’ reactions to these developments post-December 2016 are discussed.This article concludes that none of the provisions in China’s Protocol of Accession makes it obligatory for the other Members to afford a market economy status to China after December 2016.