Between Market Economy and State Capitalism: China's State-Owned Enterprises and the World Trading System

225 Pages·2022·1.643 MB·English

by  Henry Gao, Weihuan Zhou

BETWEEN MARKET ECONOMY AND
STATE CAPITALISM
Onemajorissuefacingtheworldtradingsystemtodayishowtodealwith
thechallengeofChina’sstatecapitalism.Manycommentatorsbelievethat
theexistingWTOrulesareinsufficient and,thus,newrulesareneeded.
This book challenges this conventional wisdom. Through meticulous
studiesandfreshanalysisofthecommitmentsinChina’sWTOaccession
package,existingrulesonstatecapitalisminWTOagreementsandrecent
attempts to make new rules on these issues at bilateral, regional and
multilateral levels, this book argues that existing WTO rules, especially
those on subsidies, coupled with China-specific rules in its accession
protocol, do provide feasible tools to counter China’s state capitalism.
This book also discusses the reasons for the lack of usage of these rules
andprovidesconcretepolicysuggestionsonhowtherulesmaybebetter
utilized,aswellashowtoconductconstructivenegotiationsonnewrules
intheWTOandbeyond.
isaseniorfellowattheCentreforInternationalGovernance
Innovation and Professor of Law at Singapore Management University.
He sits on the Advisory Board of the WTO Chairs Program and the
editorialboardsoftheJournalofInternationalEconomicLawandJournal
ofFinancialRegulation.
  isAssociateProfessorandDirectorofResearchatthe
FacultyofLawandJustice,UNSWSydneyandamemberoftheFaculty’s
HSF CIBEL Centre. He is the author of China’s Implementation of the
Rulings of the World Trade Organization (2019), co-Secretary of the
Society of International Economic Law (SIEL) and editorial board
memberoftheJournalofInternationalTradeLawandPolicy.
Published online by Cambridge University Press
cambridge international trade
and economic law
SeriesEditors
ProfessorLorandBartels
UniversityofCambridge
ProfessorThomasCottier
UniversityofBerne
ProfessorTomerBroude
HebrewUniversityofJerusalem
ProfessorAndreaK.Bjorklund
McGillUniversity,Montréal
Processes of economic regionalisation and globalisation have intensified
over the last decades, accompanied by increases in the regulation of
internationaltradeandeconomicsatthelevelsofinternational,regional
and national laws. At the same time, significant challenges have arisen
with respect to economic liberalization, rule-based systems of trade and
investment,and theirpoliticalandsocialimpacts.The subjectmatterof
thisseriesisinternationaleconomiclaw,inthiscontemporarycontext.Its
core is the regulation of international trade, investment, finance and
cognate areas such as intellectual property and competition policy. The
series publishes books on related regulatory areas, in particular human
rights, labour, environment and culture, as well as sustainable develop-
ment.Theseareasarehorizontallyinterconnectedandverticallylinkedat
the international, regional and national levels. The series also includes
worksongovernance,dealingwiththestructureandoperationofinter-
national organisations related to the field of international economic law
andthewaytheyinteractwithothersubjectsofinternationalandnational
law.Theseriesaimstoincludeexcellentlegaldoctrinaltreatises,aswellas
cutting-edge interdisciplinary works that engage law and the social
sciencesandhumanities.
BooksintheSeries
CapitalControlsandInternationalEconomicLaw
BryanMercurio
TheLawandPracticeofGlobalICTStandardization
OliaKanevskaiaWhitaker
NewAsianRegionalisminInternationalEconomicLaw
PashaL.Hsieh
EssentialInteroperabilityStandards:
InterfacingIntellectualPropertyandCompetitioninInternational
EconomicLaw
SimonBrinsmead
DigitalServicesinInternationalTradeLaw
InesWillemyns
Published online by Cambridge University Press
LawandPoliticsonExportRestrictions:
WTOandBeyond
Chien-HueiWu
EnergyinInternationalTradeLaw:
Concepts,RegulationandChangingMarkets
Anna-AlexandraMarhold
Shareholders’ClaimsforReflectiveLossinInternationalInvestmentLaw
LukasVanhonnaeker
TransparencyintheWTOSPSandTBTAgreements:
TheRealJewelintheCrown
MariannaB.Karttunen
PreferentialServicesLiberalization:
TheCaseoftheEuropeanUnionandFederalStates
JohannaJacobsson
EmergingPowersinInternationalEconomicLaw:
Cooperation,CompetitionandTransformation
SoniaE.RollandandDavidM.Trubek
CommitmentsandFlexibilitiesintheWTOAgreementonSubsidiesand
CountervailingMeasures
JoséGuilhermeMorenoCaiado
TheReturnoftheHomeStatetoInvestor-StateDisputes:
BringingBackDiplomaticProtection?
RodrigoPolanco
IndustrialPolicyandtheWorldTradeOrganization:
BetweenLegalConstraintsandFlexibilities
SherzodShadikhodjaev
ThePublicInternationalLawofTradeinLegalServices
DavidCollins
ThePrudentialCarve-OutforFinancialServices:
RationaleandPracticeintheGATSandPreferentialTradeAgreements
CarloMariaCantore
PreferentialServicesLiberalization:
TheCaseoftheEuropeanUnionandFederalStates
JohannaJacobsson
JudicialActsandInvestmentTreatyArbitration
BerkDemirkol
DistributiveJusticeandWorldTradeLaw:
APoliticalTheoryofInternationalTradeRegulation
OisinSuttle
FreedomofTransitandAccesstoGasPipelineNetworksunderWTOLaw
VitalilyPogoretskyy
ReclaimingDevelopmentintheWorldTradingSystem,2ndedition
Yong-ShikLee
Published online by Cambridge University Press
DevelopingCountriesandPreferentialServicesTrade
CharlotteSieber-Gasser
EstablishingJudicialAuthorityinInternationalEconomicLaw
EditedbyJoannaJemielniak,LauraNielsenandHenrikPalmerOlsen
WTODisputeSettlementandtheTRIPSAgreement:
ApplyingIntellectualPropertyStandardsinaTradeLawFramework
MatthewKennedy
Trade,Investment,InnovationandtheirImpactonAccesstoMedicines:
AnAsianPerspective
LocknieHsu
TheWTOandInternationalInvestmentLaw:
ConvergingSystems
JürgenKurtz
TheLaw,EconomicsandPoliticsofInternationalStandardisation
EditedbyPanagiotisDelimatsis
ExportRestrictionsonCriticalMineralsandMetals:
TestingtheAdequacyofWTODisciplines
IlariaEspa
OptimalRegulationandtheLawofInternationalTrade:
TheInterfacebetweentheRighttoRegulateandWTOLaw
BorisRigod
TheSocialFoundationsofWorldTrade:
Norms,Community,andConstitution
SungjoonCho
PublicParticipationandLegitimacyintheWTO
YvesBonzon
TheChallengeofSafeguardsintheWTO
FernandoPiérola
GeneralInterestsofHostStatesinInternationalInvestmentLaw
EditedbyGiorgioSacerdoti,withPiaAcconci,MaraValentiandAnnaDe
Luca
WTODisciplinesonSubsidiesandCountervailingMeasures:
BalancingPolicySpaceandLegalConstraints
DominicCoppens
TheLawofDevelopmentCooperation:
AComparativeAnalysisoftheWorldBank,theEUandGermany
PhilippDann
LiberalizingInternationalTradeafterDoha:
Multilateral,Plurilateral,Regional,andUnilateralInitiatives
DavidA.Gantz
DomesticJudicialReviewofTradeRemedies:
ExperiencesoftheMostActiveWTOMembers
EditedbyMüslümYilmaz
Published online by Cambridge University Press
TheRelevantMarketinInternationalEconomicLaw:
AComparativeAntitrustandGATTAnalysis
ChristianA.Melischek
InternationalOrganizationsinWTODisputeSettlement:
HowMuchInstitutionalSensitivity?
MarinaFoltea
PublicServicesandInternationalTradeLiberalization:
HumanRightsandGenderImplications
BarnaliChoudhury
TheLawandPoliticsofWTOWaivers:
StabilityandFlexibilityinPublicInternationalLaw
IsabelFeichtner
AfricanRegionalTradeAgreementsasLegalRegimes
JamesThuoGathii
ProcessesandProductionMethods(PPMs)inWTOLaw:
InterfacingTradeandSocialGoals
ChristianeR.Conrad
Non-DiscriminationinInternationalTradeinServices:
‘Likeness’inWTO/GATS
NicolasF.Diebold
TheLaw,EconomicsandPoliticsofRetaliationinWTODispute
Settlement
EditedbyChadP.BownandJoostPauwelyn
TheMultilateralizationofInternationalInvestmentLaw
StephanW.Schill
TradePolicyFlexibilityandEnforcementintheWTO:
ALawandEconomicsAnalysis
SimonA.B.Schropp
Published online by Cambridge University Press
Published online by Cambridge University Press
BETWEEN MARKET
ECONOMY AND STATE
CAPITALISM
’
China s State-Owned Enterprises and the World
Trading System
HENRY GAO
SingaporeManagementUniversity
WEIHUAN ZHOU
UniversityofNewSouthWales
Published online by Cambridge University Press
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www.cambridge.org
Informationonthistitle:www.cambridge.org/9781108830065
DOI:10.1017/9781108908795
©CambridgeUniversityPress&Assessment2023
Thispublicationisincopyright.Subjecttostatutoryexceptionandtotheprovisions
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placewithoutthewrittenpermissionofCambridgeUniversityPress&Assessment.
Firstpublished2023
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ISBN978-1-108-83006-5Hardback
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Published online by Cambridge University Press
CONTENTS
List of Figures and Tables xii
Foreword xiii
 
Preface and Acknowledgements xv
Table of Cases xvii
List of Abbreviations xxii
1 China, State Capitalism and the World Trading System 1
1.1 Introduction 1
1.2 StateCapitalism,State-OwnedEnterprisesandChina 4
1.3 InternationalRegulationofState-OwnedEnterprises 7
1.4 TheStructureofThisBook 9
2 The Evolution of China’s Reforms of State-Owned
Enterprises (1978–2020) 13
2.1 Introduction 13
2.2 SOEReforminChina:1978–2012 13
2.2.1 Phase1(1978–1986)andPhase2(1987–1992):Devolution
ofCorporatePower 15
2.2.2 Phase3(1993–2002):Privatisation,Corporatisation
andModernisation 17
2.2.3 Phase4(2003–2012):CreationofNationalChampions 19
2.3 TheCurrentReform:Elements,ProgressandIssues 23
2.3.1 ClassificationofSOEs 24
2.3.2 CorporateGovernance 26
2.3.3 OwnershipDiversification 29
2.3.4 RestructuringandReorganisation 34
2.3.5 StateAssetManagementSystem 38
2.4 ASummaryofCurrentStatusandFutureReform 39
2.5 Conclusion 41
ix
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