China and the WTO

Accession to the WTO

China acceded to the World Trade Organization (WTO) on 11 December 2001, after 15 years of negotiations. The accession protocol, consisting of the Protocol on the Accession of the People’s Republic of China and some 900 pages of commitments, required China to undertake the most extensive trade liberalisation commitments of any acceding member.

The accession commitments covered: tariff reduction (average tariffs fell from 15.3% to 9.8%); elimination of quantitative restrictions; liberalisation of trading rights (permitting all enterprises to import and export); opening of services sectors (banking, insurance, telecommunications, distribution, professional services); implementation of TRIPS obligations (intellectual property protection); commitments on state trading and state-owned enterprises; commitments on subsidies and anti-dumping; and acceptance of WTO dispute settlement jurisdiction.

The accession was transformative for both China and the WTO. China’s exports grew from $266 billion in 2001 to $3.7 trillion in 2024, making China the world’s largest exporter. The WTO gained a member that would become central to global trade governance, accounting for over 14% of world trade by volume.

Protocol Commitments

China’s Protocol of Accession contains specific commitments that have defined its WTO obligations. The Section 15 commitment on price comparability in anti-dumping investigations was particularly contentious. Section 15 permitted WTO members to use surrogate country methodology in anti-dumping proceedings against China for 15 years after accession (i.e., until December 2016), based on the presumption that the Chinese economy was not sufficiently market-oriented.

China has argued that Section 15 expired automatically in December 2016 and that WTO members must treat Chinese prices as market prices in anti-dumping calculations. The EU’s 2017 regulation, which maintained a modified surrogate methodology for certain cases, was challenged by China through WTO dispute settlement (China — Anti-Dumping Measures on Certain Goods from the European Union).

The Section 2 commitment on trading rights required China to eliminate the state monopoly on trading rights within three years. China implemented this through amendments to the Foreign Trade Law. The Section 3 commitment on non-discrimination required China to provide national treatment to foreign goods, services, and intellectual property holders.

Transitional Review Mechanism

The WTO’s Transitional Review Mechanism (TRM) required China to submit annual reports to the WTO on its implementation of accession commitments for the first eight years after accession (2002-2009), with a final review in the tenth year (2011). The reviews covered 16 WTO committees and covered commitments on trading rights, tariffs, non-tariff measures, agriculture, technical barriers to trade, and intellectual property.

The TRM provided a forum for WTO members to raise concerns about China’s compliance. The United States, the European Communities, Japan, and other members submitted extensive questions to China, covering issues including intellectual property enforcement, services market access, government procurement, and industrial subsidies. China’s responses to the TRM questions provide a detailed record of its implementation experience.

Market Economy Status Dispute

The question of China’s market economy status (MES) under WTO rules has been one of the most persistent legal disputes in China’s WTO relationship. China’s Protocol of Accession provided that WTO members would treat China as a non-market economy (NME) for anti-dumping purposes for 15 years after accession (Article 15).

China’s position, articulated in WTO dispute settlement and in bilateral negotiations, is that Article 15 expired automatically on 11 December 2016 and that China is entitled to MES treatment. The EU, the United States, and several other members have maintained that China continues to qualify as an NME under their domestic anti-dumping laws and that the expiry of Article 15 does not require them to apply the standard methodology to China.

The dispute has been litigated in WTO dispute settlement. In China — Anti-Dumping Measures on Certain Goods from the European Union (DS601), China challenged the EU’s post-2016 anti-dumping methodology. The panel report, circulated in 2023, largely rejected China’s claims, finding that the EU’s methodology was consistent with WTO rules. The decision has not been appealed.

Dispute Settlement: Complainant

China has been an active participant in WTO dispute settlement as both complainant and respondent. As complainant, China has initiated 25 dispute settlement proceedings (as of 2025), targeting primarily the United States and the European Union.

China’s high-profile complaints include: China — Raw Materials (DS394/395/398, combined cases against export restrictions on nine raw materials, partially successful); China — Rare Earths (DS431/432/433, export restrictions on rare earths, unsuccessful — the panel found China’s restrictions inconsistent with WTO rules); US — Anti-Dumping Methodologies (DS471, challenging US “targeted dumping” methodology, successful in part); and EU — Anti-Dumping Measures on Certain Goods from China (DS601, challenging EU’s post-2016 anti-dumping methodology, largely unsuccessful).

Dispute Settlement: Respondent

As respondent, China has been the subject of 47 dispute complaints (as of 2025). China has the second-highest number of respondent cases (after the United States). The complaints have covered intellectual property enforcement, trading rights, export restrictions, subsidies, and services market access.

The most significant respondent cases include: China — Intellectual Property Rights (DS362, 2009 — US challenge to China’s IPR enforcement, partially successful); China — Publications and Audiovisual Products (DS363, 2009 — US challenge to China’s restrictions on imported publications and films, successful — China’s trading rights restrictions were found inconsistent); China — Electronic Payment Services (DS413, 2012 — US challenge to China’s restrictions on foreign electronic payment providers in the renminbi bank card market, successful); China — Rare Earths (DS431/432/433, 2014); and China — Agricultural and Industrial Subsidies (DS567, US challenge to China’s agricultural subsidies).

US-China Trade War

The US-China trade war, initiated in 2018 under the Trump administration, represented the most significant crisis in China’s WTO relationship. The United States imposed tariffs on approximately $350 billion of Chinese imports under Section 301 of the Trade Act of 1974, citing China’s unfair trade practices including forced technology transfer, intellectual property theft, and industrial subsidies.

China responded with retaliatory tariffs on US imports and initiated WTO dispute settlement proceedings against the US Section 301 tariffs (US — Tariff Measures on Certain Goods from China, DS543). The WTO panel found that the US tariffs violated WTO rules by exceeding tariff bindings. The US blocked adoption of the panel report by appealing it to the now-inoperative WTO Appellate Body.

The trade war continued through the Biden administration. The Phase One Trade Agreement (January 2020) committed China to increase purchases of US goods and services by $200 billion over two years, to strengthen intellectual property enforcement, and to eliminate certain forced technology transfer practices. The Phase One Agreement was not an international trade agreement under WTO rules but was enforceable through the bilateral dispute resolution mechanism.

Section 301 Tariffs

The Section 301 tariffs have been a persistent legal issue. Under Section 301 of the US Trade Act of 1974, the US Trade Representative (USTR) may impose trade sanctions on a country that maintains acts, policies, or practices that are inconsistent with trade agreements or unjustifiably burden US commerce.

The USTR initiated the Section 301 investigation into China in August 2017, finding that China’s acts, policies, and practices related to technology transfer, intellectual property, and innovation were unreasonable and discriminatory. The resulting tariffs, imposed in three tranches in 2018-2019, covered a broad range of Chinese goods.

The Biden administration’s 2024 tariff review maintained and increased Section 301 tariffs on selected Chinese goods, particularly electric vehicles (100% tariff), semiconductors (50%), and solar cells (50%). The tariff increases were justified as necessary to protect US national security and to address China’s “overcapacity” in strategic industries.

Conclusion

China’s relationship with the WTO has evolved from accession (2001) through implementation (2001-2011), integration into the regular WTO work programme (2011-2018), and the current period of confrontation (2018-present). The dispute settlement record reveals China’s legal capacity to use and to defend against WTO claims. The market economy status dispute and the US-China trade war have tested the WTO legal framework. The Phase One Agreement and the Section 301 tariffs operate outside the WTO framework, raising questions about the WTO’s capacity to manage trade conflicts with a state-trading economy of China’s size and global integration.