WTO says China is backsliding on key reforms and lacks transparency on subsidies

World Trade Organization report cites studies that say subsidies could top US$900 billion – providing fuel for critics of Beijing’s practices such as the EU and US

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Subsidies for sectors such as electric vehicles are a key concern for the likes of the US and EU. Photo: Xinhua

Finbarr Berminghamin BrusselsandRobert Delaneyin Washington

Published: 8:00pm, 17 Jul 2024Updated: 5:20am, 18 Jul 2024

China’s progress on key structural changes to its economy has stalled and Beijing has not been transparent on subsidies for major industries, the World Trade Organization said on Wednesday.

In its first trade policy review for China since 2021, the WTO praised the major role its economy plays in bolstering global trade – but also highlighted some of the major complaints Beijing’s main trading partners have raised in the intervening period.

“China remained an important driving force for global economic growth … however the structural change it had previously embarked upon – away from industry and towards services – came to a halt,” read the report, compiled by economists at the WTO’s secretariat in Geneva.

The 173-page assessment – which, as is standard, was met with a 28-page response from the Chinese government – is being debated by WTO members in the Swiss city on Wednesday and Friday, in what is expected to be a spicy exchange.

The peer review is designed to “enable regular analysis of the trade policies of all WTO members”. The four biggest traders – the United States, the European Union, China and Japan – are reviewed every three years, with other members having less frequent evaluations.

At the heart of this week’s discussion will be issues of state subsidies and overcapacity, which have dominated economic exchanges between China and the West over the past year.