China’s NME status at the WTO: analysis of the debate

Purpose: Although officially ended in July 2020, China’s dispute about its non-market economy (NME) status at the World Trade Organization (WTO) is far from being resolved. The NME status enables China’s counterparts to disregard Chinese prices in antidumping proceedings and instead use the so-called surrogate country methodology. This paper aims to structure and analyze the complex debate, which emerged with the disputes China has filed against the European Union and the USA at the WTO, and therefore provide a point of reference for future analysis of and debates about China’s NME status. Design/methodology/approach: The analysis is based on the existing academic literature on the topic and on the legal WTO-related documents (e.g. multilateral agreements, China’s Accession Protocol, legal findings of the WTO dispute panels). Findings: Four different interpretations of the respective legal documents about China’s NME status are discussed and strong and weak aspects of these interpretations are pointed out. Also, several misunderstandings and mistakes appearing in the debate are clarified. Practical implications: As the question of China’s position at the WTO and its NME status has not been resolved yet and some authors believe that China will pursue its case again once the WTO Appellate Body revives its functionality, the analysis of the debate can serve as a point of reference for the academic debate and the future research on this topic. Moreover, it offers an introduction to China’s NME position at the WTO for the newcomers to this topic. Originality/value: Although China’s NME status has been much discussed, there is no literature review that would structure the debate and point out some of the (dis)advantages of the respective arguments and interpretations. Rather than adding to the large corpus of literature about the NME status, this study takes this corpus as the object of its analysis.