China has the largest piggy bank on the planet, containing more than US$3 trillion in foreign reserves. Image: iStock

These are surreal days. Despite being the second-largest economy in the world, China refuses to give up its “developing nation” status.

Since joining the World Trade Organisation in 2001, the country has become a manufacturing powerhouse and an exporting juggernaut.

In the past five years, it has pumped billions of dollars into cutting edge technology, such as superfast 5G and Artificial Intelligence, or AI, research, as well as amassing the largest piggy bank on the planet, containing more than US$3 trillion in foreign reserves.

Advanced manufacturing, a space program and a state-of-the-art transport network topped off with high-speed rail and bullet trains make China’s WTO label as obsolete as a rickshaw.

But not according to Beijing.

“The principle [of special and differential treatment or SDT] fully reflects the inclusiveness of the multilateral trade system,” Geo Feng, a spokesman for the Ministry of Commerce, told a media briefing last week.

“Every member has the right to choose its own foreign economic and trade policies,” Geo added.

The United States and the European Union would take exception to that statement.

Washington has constantly made it clear that Beijing has been bending, if not breaking, the rules when it comes to a heavily subsidized state-owned sector financially drip-fed by major government-backed banks.

With crucial industries ring-fenced and a Great Firewall encompassing China’s online world, President Xi Jinping’s government has managed to turn WTO loop-holes into gaping superhighways, the US has argued.

To combat what Washington perceived to be a stacked deck, US President Donald Trump launched a trade war in 2018. Ten months later, the world’s two largest economies have held marathon peace talks to end a conflict which has seen tariffs imposed on Chinese imports worth up to $250 billion.

“China’s position on WTO reform has been very clear. China is the largest developing country in the world,” Gao said. “We will join hands with other developing members in firmly safeguarding our basic rights.”

Still, Beijing’s relationship with the West has changed dramatically in the past two years with the EU coining the phrase “promise fatigue” when it comes to “concrete” reforms.

The economic Cold War with the US and pressure from Europe’s vast trading bloc have focused minds in Beijing with renewed pledges to further open up a raft of sectors to foreign companies.

“There is broad agreement within the EU that it is important to communicate to China that we are at a point where we want to see … concrete steps forward on their willingness to work with us at the WTO,” an EU diplomat said.

“What is important is that we give a signal to China that the EU is a partner but also a competitor and requires Beijing to make some steps.”

Last year, European Commission President Jean-Claude Juncker reiterated that Beijing had to show more urgency in fulfilling promises it had already made.

Protectionist policies are still widely in place even after Washington and Brussels demanded greater access during a review of China’s WTO membership back in July.

“If China wishes to open up it can do so,” Juncker said at a news conference in Beijing’s Great Hall of the People following the annual summit between China and the EU in 2018.

“It knows how to open up,” he added.

The same question will probably be asked when Premier Li Keqiang arrives for Tuesday’s talkfest in Brussels.

Mind you, Geo Feng seems to have already answered it.

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