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Sunshine over Shanghai: Can the WTO Illuminate the Murky World of Chinese SOEs?

Published online by Cambridge University Press:  13 October 2017

ROBERT WOLFE
ROBERT WOLFE*
Affiliation:
School of Policy Studies, Queen's University, Kingston, ON
*
Email: Robert.wolfe@queensu.ca.
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Abstract

State-owned enterprises (SOEs) are a major force in the Chinese economy and a growing presence in international trade and investment. The challenge to the WTO legal regime is commercial, given the size of SOEs and their share of Chinese output, and political, given worries that trade and investment by SOEs may be driven by public policy goals. And both challenges may be exacerbated by the murky world of Chinese SOEs. In this article, I first review whether Chinese SOEs are a problem for the WTO, and whether more sunshine on their operations might be a useful discipline. I then ask what we know about SOEs inside the WTO, including in the Trade Policy Review Mechanism. Since the answer is, not much, I consider whether mega-regional trade negotiations offer a better approach. My answer being negative, I finally consider whether an attempt to negotiate a WTO Reference Paper on SOEs might help. I conclude that transparency is likely to be a better discipline on the spillovers associated with SOEs than a search for binding rules, while also helping everyone better understand the efficiency effects.

Type
Review Article
Information
World Trade Review , Volume 16 , Issue 4: Symposium on State-Owned Enterprises in China , October 2017 , pp. 713 - 732
Copyright
Copyright © Robert Wolfe 2017 

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Footnotes

I am grateful to Thomas Bollyky, Cary Coglianese, Daniel Goldbloom, Bernard Hoekman, Petros Mavroidis, and Charles Sabel, and to officials in Global Affairs Canada and the WTO Secretariat, for helpful suggestions that I draw on without further attribution. This article was prepared for the seminar on ‘State Owned Enterprises (SOEs) in China: Trade and Competition Issues’, Columbia Law School, 21 November 2016.

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