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Between Market Economy and State Capitalism: China's State-Owned Enterprises and the World Trading System Henry Gao and Weihuan Zhou. Cambridge: Cambridge University Press, 2022. 250 pp. £85.00 (hbk). ISBN 9781108830065
China's expanding economic influence and the distinctive characteristics of its state-led economic model have evoked a mix of admiration and anxiety. Consequently, there is a growing narrative that questions the World Trade Organization's (WTO) ability to effectively address the practices of China that contravene the principles of the multilateral trading system. This situation is blamed for the deterioration of the WTO's dispute settlement and negotiation functions and its overall effectiveness.
In Between Market Economy and State Capitalism: China's State-Owned Enterprises and the World Trading System, Henry Gao and Weihuan Zhou, two experts on international trade law, challenge this conventional narrative and address two key questions. First, how compatible is China's state capitalism with the existing rules and norms of the world trading system? Second, can existing WTO rules address China's state capitalism, particularly the market-distortive conduct of Chinese state-owned enterprises (SOEs) that are supported by industrial policies and subsidies?
To answer these questions, the book first provides an in-depth examination of China's state capitalism, with a particular focus on the role of SOEs and their impact on the global trading system. It delves into the historical context of China's SOE reform, tracing the transformation since 1978...