Journal of International Service

February14th

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This paper examines the roles of state-owned enterprises (SOEs) and of the domestic private sector in the trade-related policymaking process in China and places them in the broader context of economic policymaking. It considers the shifting roles of the state-owned and private sectors and how re-cent reforms have expanded the economic role of the private sector while preserving the political position of the large SOEs. It also analyzes China‟s recent entry into the WTO dispute settlement system as a plaintiff and finds that large SOEs in strategic industries tend to dominate this emerging area of Chinese trade policy. While the SOEs’ importance in the economy has lessened, they retain access to most of the monetary and political resources they have enjoyed for decades, and in many ways, their ability to influence policy has actually grown due to the structure of the reforms pursued by President Hu Jintao. Currently, these firms are key participants in China‟s emerging use of the WTO dispute settlement system and other trade remedies. As China becomes more active in pursuing its national interests in the WTO (and in the trade regime generally), it needs to develop a formal mechanism for the private sector to help drive trade policy, as is seen in advanced economies. Doing so will help ensure that China‟s trade-related policymaking apparatus is better positioned for the future by including input from those most likely to drive China‟s economic growth.

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