China's eighth WTO Trade Policy Review is taking place on October 20 and 22 (the seventh review was in July 2018). As part of these reviews, the government being reviewed submits a "policy statement." This piece summarizes the policy statement submitted by China (WTO document WT/TPR/G/415), which is a mix of praise for liberalization and the market, on the one hand, and support for socialism, on the other.

In its introduction, the policy statement starts off with a reference to Xi Jinping: "Following the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, China pursues high-quality development as the main theme, grounds its efforts on the new development stage, applies the new development philosophy, and fosters a new development paradigm." At this point, it offers a number of pro-liberalization remarks: "China has been continuously enhancing the liberalization and facilitation of trade and investment, and pursuing a new pattern of opening-up on all fronts"; and "China is committed to developing new systems for an open economy, building a community of a shared future for mankind, and making significant contributions to the world economic recovery." In the next paragraph, though, the policy statement says that "China proposes to accelerate efforts to foster a new development paradigm with domestic circulation as the mainstay and domestic and international circulations reinforcing each other." (This "dual circulation" strategy has been said to describe "a new development pattern where domestic and foreign markets can boost each other, with the domestic market as the mainstay.")

Turning to the section of the statement on "new development," China emphasized its socialism and its developing country status. The statement says: "After more than 40 years of reform and opening up, China has embarked on a new journey towards fully building a modern socialist country"; and "China is still in the primary stage of socialism and will remain so for a long time ... . China's international status as the world's largest developing country has not changed."

The next section refers to "high-level opening up" and "win-win cooperation." According to the statement, "China keeps opening up more sectors and broader fields in a more thorough manner, and relies on the advantages of the vast domestic markets to promote international cooperation and achieve mutual benefits and win-win." In particular, "[s]ince the last review, China has further streamlined import administration procedures and continuously lowered import tariffs"; "[o]n 4 November 2020, China set up ten demonstration zones on import promotion, … "; and China has continuously improved trade facilitation. With regard to foreign investment, "China unswervingly promotes opening up, improves the legal system for foreign investment, continuously liberalizes foreign investment market access, and expands the encouraged categories for foreign investment," and in this regard "has promulgated the Foreign Investment Law and its implementing regulations." It has also developed pilot free trade zones and free trade ports.

Moving to a section on "building an open world economy and promoting the construction of a community with a shared future for mankind," the statement says that, among other things, China fully supports global cooperation on combating COVID-19 with concrete actions, firmly supports the multilateral trading system with the WTO at its core, and wants to promote a fairer and more equitable global economic governance system.

Finally, in a section on deepening reform across the board and building a high-standard market system, China refers to both the role of the market and the government. It says that it "firmly commits itself to comprehensively deepening reform, fully leverages the decisive role of the market in allocating resources and gives better play to the role of government to ensure better alignment between an efficient market and a well-functioning government." It also notes that "China promotes the domestic circulation, while facilitates the 'dual circulation' of domestic and international circulations," and also "[c]onsumer spending is boosted across the board, and the potential for investment is unleashed." In this section, it talks about overcapacity, noting that with regard to "[d]issolving excess production capacity and improving the quality of supply," since the last review, "China has continued reducing capacity through market-oriented, law-based, systematic and structural approaches." More specifically, "[r]esettlement of employees has been steadily carried out," and "[i]n the iron and steel sector, China has continuously deepened the supply-side structural reform, implemented capacity replacement and improved the filing requirement of iron steel projects," while "[i]n the coal sector, China has eliminated out-dated production capacity, improved the quality of the supply system, and optimized the coal production capacity layout." Also in this section, China talks about further strengthening the intellectual property rights regime; improving property rights and promoting market-based allocation of production factors; and improving the performance of state-owned assets and state-owned enterprises reform.

The minutes of the meetings and questions and answers with other WTO Members should provide more details about the review, and will be released approximately six weeks after the review meetings are completed.