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Paul Blustein - 10 Sept

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Paul Blustein 10 Sept
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Chinas entry into the World Trade Organization (WTO) in 2001 was heralded as historic, and for good reason: the worlds most populous nation was joining the rule-based system that has governed international commerce since World War II. But the full ramifications of that event are only now becoming apparent, as the Chinese economic juggernaut has evolved in unanticipated and profoundly troublesome ways. In this book, journalist Paul Blustein chronicles the contentious process resulting in Chinas WTO membership and the transformative changes that followed, both good and bad for China, for its trading partners, and for the global trading system as a whole.The book recounts how China opened its markets and underwent far-reaching reforms that fuelled its economic takeoff, but then adopted policies a cheap currency and heavy-handed state intervention that unfairly disadvantaged foreign competitors and circumvented WTO rules. Events took a potentially catastrophic turn in 2018 with the eruption of a trade war between China and the United States, which has brought the trading system to a breaking point. Regardless of how the latest confrontation unfolds, the world will be grappling for decades with the challenges posed by China Inc.

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2019 by the Centre for International Governance Innovation ALL RIGHTS RESERVED - photo 1

2019 by the Centre for International Governance Innovation ALL RIGHTS RESERVED - photo 2

2019 by the Centre for International Governance Innovation

ALL RIGHTS RESERVED. No part of this publication may be reproduced, stored in a retrieval system or transmitted by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior written permission of the publisher, application for which should be addressed to the Centre for International Governance Innovation, 67 Erb Street West, Waterloo, Ontario, Canada N2L 6C2 or .

978-1-928096-84-9 (hardcover)

978-1-928096-85-6 (paperback)

978-1-928096-86-3 (ePUB)

978-1-928096-87-0 (ePDF)

Library and Archives Canada Cataloguing in Publication

Title: Schism: China, America and the fracturing of the global trading system / Paul Blustein.

Names: Blustein, Paul, author. | Centre for International Governance Innovation, publisher.

Description: Includes bibliographical references.

Identifiers: Canadiana (print) 20190118229 | Canadiana (ebook) 20190118253 | ISBN

9781928096856 (softcover) | ISBN 9781928096849 (hardcover) | ISBN 9781928096863 (HTML) | ISBN 9781928096870 (PDF)

Subjects: LCSH: World Trade Organization. | LCSH: United StatesCommerceChina. |

LCSH: ChinaCommerceUnited States.

Classification: LCC HF3128 .B68 2019 | DDC 382.0973/051dc23

The opinions expressed in this publication are those of the author and do not necessarily reflect the views of the Centre for International Governance Innovation or its Board of Directors.

Printed and bound in Canada. This product is made of recycled materials and other controlled sources.

Cover design by Melodie Wakefield.

Page design by Brooklynn Schwartz.

Centre for International Governance Innovation and CIGI are registered trademarks.

Centre for International
Governance Innovation

Centre for International Governance Innovation

67 Erb Street West

Waterloo, ON Canada N2L 6C2

www.cigionline.org

ACRONYMS AND ABBREVIATIONS 5G fifth-generation AD anti-dumping - photo 3

ACRONYMS AND ABBREVIATIONS

5G

fifth-generation

AD

anti-dumping

APEC

Asia Pacific Economic Cooperation

APT1

Advanced Persistent Threat 1

ASEAN

Association of Southeast Asian Nations

CEO

chief executive officer

CFIUS

Committee on Foreign Investment in the United States

CIA

Central Intelligence Agency

CIGI

Centre for International Governance Innovation

CNR

China North Locomotive & Rolling Stock Corp.

COMAC

Commercial Aircraft Company of China

CPTPP

Comprehensive and Progressive Agreement for Trans-Pacific Partnership

CSIS

Center for Strategic and International Studies

CSR

China South Locomotive & Rolling Stock Corp.

CUSMA

Canada-United States-Mexico Agreement

CVD

countervailing duties

DRC

Development Research Center

FDI

foreign direct investment

GATT

General Agreement on Tariffs and Trade

GE

General Electric

IMF

International Monetary Fund

ISSI

Integrated Silicon Solutions

IT

information technology

JCCT

Joint Commission on Commerce and Trade

JV

joint venture

MERICS

Mercator Institute for China Studies

MFN

most-favoured-nation

MLP

National Medium- and Long-Term Plan for the Development of Science and Technology

NAFTA

North American Free Trade Agreement

NATO

North Atlantic Treaty Organization

NBER

National Bureau of Economic Research

NCSC

National Cyber Security Centre

NDRC

National Development and Reform Commission

NSA

National Security Agency

OECD

Organisation for Economic Co-operation and Development

PLA

Peoples Liberation Army

PNTR

permanent normal trading relations

PRC

Peoples Republic of China

RCEP

Regional Comprehensive Economic Partnership

RMB

renminbi

SASAC

State-owned Assets Supervision and Administration Commission

SED

Strategic Economic Dialogue

S&ED

Strategic and Economic Dialogue

SEI

Strategic Emerging Industries

SMEs

small and medium-sized enterprises

SOEs

state-owned enterprises

TAA

Trade Adjustment Assistance

TPP

Trans-Pacific Partnership

TRIPS

Trade-Related Aspects of Intellectual Property Rights

USITC

United States International Trade Commission

USTR

United States Trade Representative

WTO

World Trade Organization

To Sidney,

Who has inspired my fondest dream, namely that a few decades from now he will pull a yellowed copy of this book off his parents shelf and think to himself, Wow, the world sure was messed up when Grandpa wrote this. Good thing my generation fixed it!

AUTHORS NOTE AND ACKNOWLEDGEMENTS I suppose the first person I should thank is - photo 4

AUTHORS NOTE AND ACKNOWLEDGEMENTS

I suppose the first person I should thank is Donald Trump, since the idea for writing this book occurred to me during his presidential campaign when I heard some of his more outlandish statements regarding Chinas entry into the World Trade Organization. This was a subject I knew a thing or two about, having covered much of the process as a reporter for The Washington Post, and having also interviewed a number of the key players in the years after the accession. A more serious intellectual debt is owed to Mark Wu of Harvard Law School, whose seminal article The China Inc. Challenge to Global Trade Governance greatly helped me frame my approach to the book, as did an enjoyable conversation with Mark in Cambridge, MA.

So I was delighted when the Centre for International Governance Innovation (CIGI), where Im a senior fellow, approved my book proposal and generously provided the necessary financial support. This was not an inexpensive undertaking: the research and writing spanned more than two years and required travel from my home in Japan to Beijing, Shanghai, Geneva, Brussels, Paris, Washington and Little Rock, Arkansas, home of the William J. Clinton Presidential Library.

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