Back in 2001, China was admitted to the World Trade Organisation (WTO). As a major player in that move, the USA felt that it could crowbar China into becoming a capitalist market economy. At the time, China was defined as a ‘non-market economy’, with stringent conditions. These conditions enabled the USA and the EU to deploy the new term for tariffs – ‘anti-dumping’ rules – against China.
However, the initial conditions have now passed, with the WTO set to include China as a full member. The EU objected, China filed a major challenge and the USA has now backed the EU’s position. China has, of course, pointed out that the USA is mistaken.
While this is usually cast as an effort by China to wrest control from the USA et al, what is actually at stake is how one defines ‘market economy’. For the USA and the EU, ‘market economy’ means a capitalist market economy, in which the state should not interfere. The Chinese state emphatically that their system is also a market economy, but it is clearly not a capitalist market economy. Instead, as I have indicated earlier, it is a socialist market economy.
At stake here is a global struggle to redefine what market economy means. If the Chinese are successful in their bid for full membership, it will mean that much of the rest of the world will have to come to terms with what a socialist market economy entails.