US efforts to strip China of its ‘developing nation’ tag reflect an increasingly polarised world
- The US House’s unanimous vote on the PRC Is Not a Developing Country Act is just the latest on a long list of quarrels between Beijing and Washington
- The facts on the ground are that China is not yet a developed country, but facts probably won’t matter to angry and hostile US politicians
The unanimous vote by the US House of Representatives to deprive China of its status as a “developing country” is set to open a new diplomatic row between Washington and Beijing, dealing another blow to an already-fragile global governance system.
It is not the first time that the two countries have quarrelled over the economic status of China. The Chinese government, for instance, tried for about a decade to persuade the US and EU, two of its largest trading partners, to treat China as a market economy – a move that would help Chinese exporters in anti-dumping cases and give Beijing a nominal thumbs up to its economic liberalisation efforts.
The “market economy” label affects how fair prices are calculated in anti-dumping cases, but the “developing country” tag is much more important to China due to its political and economic implications. The latter represents the core of the country’s self-positioning since it began to officially join international bodies in the 1970s.
For the past half-century or so, the “developing country” label has become the default basis on which China participates in international organisations and strikes agreements ranging from trade to climate change.
When dealing with Washington, Beijing has now and again returned to the line that the US is the world’s largest developed economy, while China is the largest developing economy.
The latest efforts by US politicians to revoke China’s “developing country” status will be seen by Beijing as another trick by Washington to contain and suppress the nation’s development. The full bipartisan support towards the PRC Is Not a Developing Country Act only shows the depth of the anger and hostility against China.
But China is unlikely to give up its “developing” label easily. Li Qiang, the country’s new premier, said last week in his first speech at the Boao Forum for Asia that China remains the world’s largest developing economy, in a rebuke to US politicians.
While there is no universally agreed yardstick to measure whether a country is developing or developed, the facts on the ground are that China remains a developing economy.
The country’s per capita GDP is near the threshold of a high-income country as defined by the World Bank, but it is not yet there. On the Human Development Index of the United Nations, which covers life expectancy, education and standard of living, China ranked 79th in 2021. It is simply not right to put China in the same developmental group as the US or Germany.
Still, in a world where Beijing and Washington are at odds over more than just China’s developmental status, the facts probably don’t matter much. The US side will find plenty of excuses to remove China’s “developing country” label, and ironically, it may rely partly on Chinese propaganda.
Beijing’s conclusion that “the East is on the rise, while the West is in decline”, as well as its ambitious Belt and Road Initiative, for example, give the impression that China no longer views itself as a Third World country.
In Confucian philosophy, identifying things by the right names is the start to making things right, and without proper labelling, tasks cannot be done.
China probably knows it will be increasingly difficult to justify the “developing” tag as its economic might and influence grow. But China’s strategic alliance with the developing world is not going to change, while the nation is taking up greater responsibilities and obligations on the global stage, including its pledge to achieve peak carbon emissions by 2030 and carbon neutrality by 2060.
At the end of the day, the debate on whether China is a developing country reflects the sad fact that the world is polarised by Beijing and Washington’s divergent views over a long list of issues. Governments, multinational companies, and even individuals will be pushed to take sides. It is not going to end well for all.
