In 2001, the People’s Republic of China was given membership to the World Trade Organization. This was a big deal for China, it gave China access to the trading framework used by the world’s trade superpowers. China’s membership in the WTO helped the country spread its influence (and goods) around the globe at an extremely fast pace. When entering the WTO, China was not given what is called “Market Economy Status” (MES) instead, it was given a date at which the nation’s markets would be reexamined, that date was December 11th, 2016.
Let’s first deal with what exactly Market Economy Status means. This status qualifies a country as having a market which upholds international market norms, specifically in the form of free unrestrained trade. A nation which controls its markets for economic or political gain could not be awarded such status. Having this status is important as this fact places member nations on an even playing field, allowing for better trade opportunities based on trust.
China has, since its induction in the WTO, wants to be considered on this list of nations, to be considered to have a Market Economy Status. Market Economy Status for China gives the country more legitimacy in foreign trade, which could strengthen the nation’s financial industries. But as of Monday, many other WTO member nations do not consider China to have proven itself to obtain Market Economy Status. The reluctance to give the nation such status comes from the idea that the country is suspected of economic “dumping”.
Dumping, in economic terms, defines a market power’s efforts to flood the market with goods that are priced far lower than other competitors. China is specifically doing this with the sale of certain raw and refined resources. The full definition of dumping as laid out by the WTO in its legal texts is linked below.