Beyond Good Compliance: Examining Chinas Implementation in the WTO Dispute Settlement System

Abstract

China is often portrayed as flouting international law and disregarding international tribunals. Yet, in the World Trade Organization (WTO), China boasts an impressive track record of good compliance with adverse rulings. This is in stark contrast to other major economies, such as the United States and the European Union, which have frequently prolonged cases and resisted modifying their regulations in accordance with WTO rulings and recommendations.

In this light, this study considers how China has been able to achieve such a record of compliance despite its continued adherence to trade-restrictive industrial policies. The dissertation first studies how China has specifically implemented WTO dispute rulings concerning three of its key strategic sectors: the renewable energy, automobile, and steel industries. Then, Chinas post-WTO dispute policies are examined to analyze the domestic restructuring and changes in priority. This will help to better understand Chinas pattern of compliance in relation to its industrial policy.

This paper argues that China has shown good compliance because the restructuring of its domestic industries and policy changes due to rapid industrial growth have outpaced the WTO Dispute Settlement System. The case studies presented herein suggest that China has implemented the rulings when the contested measures were no longer needed, had expired or had been subsequently replaced by the time it was required to make changes. In this way, China has both achieved its domestic industrial goals and maintained a record of good compliance. This paper aims to provide insight into how the current Dispute Settlement System allows for China, and other WTO members alike, to navigate the systems limitations and to help to understand Chinas behavior as a key player in the international trading regime.