Editor's note: Yuan Sha, a special commentator on current affairs for CGTN, is deputy director at the Department for Global Governance under the China Institute of International Studies. The article reflects the author's views and not necessarily those of CGTN.

One of the most notable remarks Chinese Premier Li Qiang addressed, at a high-level meeting on the Global Development Initiative on the sidelines of the general debate of the 80th session of the United Nations General Assembly on Tuesday, was his announcement that "as a responsible major developing country, China will not seek new special and differential treatment in current and future World Trade Organization (WTO) negotiations." Why is China making this major policy reorientation now, and how significant is it to China, the WTO, as well as the multilateral world trading system?

China's policy reorientation on the SDT

Special and differential treatment (SDT) is an important cornerstone of the WTO's multilateral trading system. This principle acknowledges the structural differences and economic gaps between developed and developing countries, and its essence is "non-reciprocity," which is reflected in two dimensions.

On the one hand, developed countries proactively and unilaterally provide preferential measures to developing countries, such as granting favorable market access, technological assistance and capacity-building. On the other hand, developing countries can undertake fewer obligations and enjoy preferential treatment, such as lower tariff rates, flexibility in rules, transitional arrangements and longer preparation time in trade negotiations, thereby compensating for their inherent disadvantages in participating in global competition and promoting fairness in the global economic order.

Since joining the WTO in 2001, China, as a developing country, has enjoyed SDT for over two decades. Now, despite becoming the world's second-largest economy and the largest goods trading nation, China remains a developing country and lags behind in per capita gross national income with $12,720 in 2022, compared with the World Bank benchmark for developed countries of $13,935 and is only one-sixth of the U.S. ($76,330 in 2022).

As a developing country with its internal economic issues, China's voluntary relinquishment of its SDT is exceptional. It means that China will commit itself to a higher standard in current and future negotiations within the WTO framework and take a more proactive initiative in promoting WTO reform. However, China's decision is not an "abandonment of status" as a developing country and does not alter China's legal status or existing rights within the WTO.

Just as Han Yong, director general of the Department of WTO Affairs at the Ministry of Commerce, put it succinctly that China has three unchanging positions in current and future WTO negotiations: "China's status as a developing member will not change, its determination to safeguard the legitimate rights and interests of developing members will not change and its stance of promoting global trade and investment liberalization and facilitation will not change."

A show of goodwill and an act of responsibility

This major policy shift reflects China's careful assessment of its own development progress and international responsibilities, as well as the changing international environment and the urgency for reform at the WTO and the broader global governance system.

Firstly, it demonstrates China's readiness to assume a greater responsibility commensurate with its level of development. Although China's per capita income is still at a medium level and its internal development is unbalanced, it believes that its overall economic weight gives it adequate capacity and special responsibility in the international trading system. Especially amid heightened trade wars and disruptions in global supply chains, China's decision to forgo SDT in new negotiations aims to inject a strong impetus into promoting trade liberalization and reinvigorating global development.

Moreover, it is an important measure taken by China to revive the WTO. Established in 1995, the WTO serves as the cornerstone of the multilateral trading system, with a mission to promote free trade, resolve trade disputes and ensure fair competition. However, the organization is currently facing mounting challenges, with its efficiency and authority greatly undermined. The U.S., in particular, blocked the functioning of the WTO Appellate Body and took issue with China's developing country status and preferential treatment.

By taking this proactive stance, China aims to demonstrate its utmost sincerity in bridging the North-South divisions within the WTO system and helping to resuscitate the WTO. China's new moves have won applause from WTO Director-General Ngozi Okonjo-Iweala, who welcomed China's announcement, calling it "a pivotal moment for the WTO."

Additionally, it commits China's firm stance as a "responsible major country" in contributing to global governance reform. Against a rising tide of unilateralism and anti-globalization, China aims to convey a clear message: China is not only a beneficiary of globalization but also a defender and builder of globalization.

This move is also a concrete step in line with China's recently proposed Global Governance Initiative, which is aimed at promoting reform of global governance institutions in a more fair and reasonable manner and demonstrates how major emerging countries could contribute in a more responsible and innovative manner to safeguarding multilateralism and the world order.

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