CHINA'S STATUS AS A 'DEVELOPING COUNTRY' IN CONTENTION

CHINA'S STATUS AS A 'DEVELOPING COUNTRY' IN CONTENTION

Context:

As of January 12, 2022, China's status as a 'developing country' in the World Trade Organization (WTO) has become contentious.

Key Points:

• Many countries express concern over China, an upper-middle-income nation with benefits reserved for developing countries under WTO rules.
• In addition, concerns raised over the 'least developed country (LDC) status, Bangladesh may lose this tag after surpassing India in per capita GDP.

Background:

• Last month, China completed 20 years in the World Trade Organization. On December 11, 2001, it joined the international organization and became its 143rd member.
• It has been one of China's best economic decisions, as it is now the world's largest economy in terms of purchasing power parity terms, the second largest in terms of market exchange rates, and the world's largest trading nation.
• So far, more than half a billion Chinese people have been lifted out of poverty in two decades.
• China is now the largest trading country in 120 countries, including the US.

How the 'developing' tag helps nations:

• The WTO division is somewhat similar to the Indian reservation system, in which the poor are given special treatment in education and employment.
• The WTO provides for emerging economic rights by providing specialized and differential treatment (S&DT) in its agreements.
• Such provisions allow those countries to implement long-term agreements. They also benefit from a commitment to better trading opportunities.