All the Tea in China: Solving the ‘China Problem’ at the WTO

The history of China’s accession to the WTO has been a rollercoaster of alacrity and acrimony. Hailed as another milestone in the WTO‐era, it soon proved to be a thorn in the side of the multilateral edifice. Various complaints have arisen, and all have to do with the role of state involvement in the workings of the economy. The cause of concern is not state involvement per se – it is state involvement in an economy of unprecedented size. State‐owned enterprises and transfer of technology are the expressions of state involvement that have caught most of the attention. In this paper we argue in favor of multilateral solutions to address both matters. Staying idle is not an option as the trading community otherwise will continue to be confronted with unilateral responses that are largely ineffective while generating significant negative external effects. A call for renewed commitment to multilateralism is more warranted than ever. Unilateral action has increasingly proved to be ineffective. It is time to try the carrot while keeping the stick always available.