The two-front fight with the US and EU on trade and investment are making China more determined to shape global rules.
The Government Work Report issued by Premier Li Keqiang on March 5 (see March 5 Tip Sheet) was explicit that China will be much more “proactive” in shaping global rules on trade:
"China will be proactive about developing global partnerships, make full use of international platforms to enhance policy coordination, and expand converging interests with other countries.""We will actively take part in reform of the WTO, firmly uphold the multilateral trading regime, play a positive role in the formulation of multilateral trade rules, and promote the establishment of a fair, reasonable, and transparent system of international trade rules."
Get smart: China’s increased urgency reflects the fact that the US and EU – though employing vastly different approaches – are both trying to reform the global trading system to address perceived inequities related to China’s trade and investment practices.
To oversimplify, the US and EU want to force China to stop subsidizing domestic firms, and to allow more market access to foreign firms.
China, on the other hand, wants to preserve its right to take supportive measures by dint of its being a developing country.
And that’s where we are. See everybody in Q2 2019.