China is not a developing country and should not be treated as such

China has a long history of manipulating the international system to its advantage. It requires access to its economy, bowing to Beijing’s demands, whether on content, sharing proprietary information, or partnering with Chinese companies.

But there is another, less discussed area in which Beijing is playing the system off: China is using its “developing country” status to benefit from provisions and special treatment in treaties and international organizations designed to help poor nations.

China was a low-income country – three decades ago. But today its economy rivals or surpasses that of other developed countries.

The World Bank credits China with having the second largest economy in the world in 2021, behind only the US World Bank.

In terms of trade and foreign investment, China is in the top 5 of all nations. China, too, has gone from developing aid recipient to donor. The China Africa Research Initiative at Johns Hopkins University puts Chinese foreign aid spending at around US$3 billion a year. This puts it in the top third of the Organization for Economic Co-operation and Development (OECD) donor countries – level with Australia, Denmark and Spain.

In short, China walks, speaks and acts like a developed economy. China may have earned designation as a developing country three decades ago. But not anymore.

But in international organizations like the United Nations and some international treaties, China continues to benefit from provisions and differential treatment designed to help poor countries.

For example, when allocating the organization’s costs to member states, the UN applies several deductions for developing countries, including an adjustment for debt and low per capita income. For China, these rebates reduced its regular budget allocation by nearly $50 million in 2023.

China has also declared itself a developing country in the World Trade Organization. Why? The WTO grants developing countries “special and differential treatment”, such as longer transition periods to comply with some WTO commitments and the ability to benefit from developed country commitments to improve trading opportunities for developing countries.

At the World Bank, China continues to receive billions of dollars in loans, although its income level should make it out of the question.

In addition, as a “developing country”, China benefits from more lax treatment in several treaties. For example, the Kigali Amendment to the Montreal Protocol on Substances that Deplete the Ozone Layer requires developed nations to reduce their production and use of fluorocarbons by 85% by 2036. However, developing countries – and China – will be given an additional 10 years to achieve this goal.

The recently negotiated agreement on “Marine Biodiversity in Areas Beyond National Jurisdiction” similarly requires that the benefits arising from the activities addressed in the agreement be “shared in a fair and equitable manner” and lays down a special treatment and support for developing countries. Likewise, the new pandemic agreement currently being negotiated would oblige developed nations to create incentives for the transfer of technology and know-how to developing countries and to ensure a “fair distribution” of pandemic-related products to developing countries. As it stands, China is poised to benefit from these provisions as a “developing country.”

It boils down to this: The world’s second largest economy takes advantage of special provisions in international treaties and organizations designed to help poor nations. It’s not fair”. It’s frankly unfair.

The US and like-minded countries must strike back and ensure that wealthy, economically competitive nations like China do not enjoy benefits and preferences designed to support developing countries. This means treaties need to be changed and rules adopted in international organizations to ensure special benefits apply to poor countries, as intended by defining “developing countries” as lower-middle-income, low-income and least-developed countries are as defined by the World Bank and the UN

Brett D. Schaefer is Jay Kingham Senior Research Fellow in International Regulatory Affairs at the Heritage Foundation.

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