At WTO, China’s trade policy sparks war of words amid a darkening geopolitical outlook

Concerns about industrial overcapacity and lack of transparency in state subsidies elicit ‘frank and open’ exchanges, revealing deep schisms

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Employees work on an electric-vehicle production line at a factory under Jiangling Group Electric Vehicle in Nanchang, China, on May 22, 2024. The European Union this week imposed provisional tariffs on Chinese-made EVs. Photo: Reuters

Published: 1:20am, 20 Jul 2024Updated: 1:45am, 20 Jul 2024

China’s trade policy drew castigation in Geneva this week as its economic rivals found fault with a lack of transparency in its state subsidies and in the impact of industrial overcapacity in the Chinese economy.

After the World Trade Organization itself pointed to the opaque nature of China’s state support measures in a lengthy report, a two-day session at the body saw more than 70 of its members take the floor and Beijing fielding over 1,500 written questions.

Li Fei, China’s vice-minister for commerce, led a delegation of more than 40 officials travelling from the Chinese capital, delivering an opening statement that pledged commitment to open trade and liberalisation.

“China is a fertile ground for foreign companies to take root and thrive,” Li said.

“China strives to foster a world-class, market-oriented, law-based and internationalised business environment. Multinational companies are upbeat about investing in China.”

Why the EU, US are concerned about China’s overcapacity

On Friday, Han Yong, director general of WTO affairs at China’s commerce ministry, refuted claims of the distortionary impacts of excess capacity in the country’s manufacturing sector.