Global Trade and Trade Policies of China | Editorials by CSS & PMS Aspirants
The following article, “Global Trade and Trade Policies of China”, is written by Ihtesham Hussain, a student of Sir Syed Kazim Ali. Moreover, the article is written on the same pattern, taught by Sir to his students, scoring the highest marks in compulsory subjects for years. Sir Kazim has uploaded his students’ solved past paper questions so other thousands of aspirants can understand how to crack a topic or question, how to write relevantly, what coherence is, and how to include and connect ideas, opinions, and suggestions to score the maximum.
China’s trade policies have long been controversial in global economic discourse. As the world’s second-largest economy and the largest exporter, Beijing’s trade practices shape international markets. Yet they often draw criticism for their opaque regulatory frameworks, state-driven industrial strategies, and non-reciprocal trade terms. Thus, while China continues to position itself as a champion of globalization, its trade policies raise pressing concerns about market distortions, unfair competition, and geopolitical leverage.
Going directly to the crux of the matter, a crucial issue remains whether China’s global trade policies foster a fair and competitive economic environment or tilt the balance in Beijing’s favor through state intervention and protectionism. So, to grasp the full extent of this debate, a closer look at China’s economic playbook reveals five key arguments supporting the notion that Beijing’s policies serve its strategic ambitions at the expense of global trade fairness.
State Capitalism and Market Distortions
To begin with, one of the most significant criticisms of China’s trade policies is its heavy reliance on state capitalism, where government subsidies and state-owned enterprises (SOEs) dominate key industries. Unlike economies that adhere to free-market principles, China’s model allows its firms – many of which are backed by state banks – to operate with financial cushions that foreign competitors lack. As a result, these subsidies grant Chinese firms an artificial competitive edge, which enables them to undercut global rivals; flood international markets with cheap goods; and push foreign businesses into insolvency. For instance, China’s steel industry, backed by billions in government support, has led to massive global overproduction, driving prices down and forcing steelmakers in Europe and the US to shut down. Therefore, such state-driven distortions create an unlevel playing field, making it nearly impossible for non-subsidized companies to compete fairly.
Unfair Trade Practices and Intellectual Property Theft
Furthermore, despite China’s commitments to global trade rules, allegations of unfair practices – including forced technology transfers and intellectual property (IP) theft – persist. In particular, foreign firms operating in China frequently face coercive policies that require them to share proprietary technology as a prerequisite for market access. Although Beijing has made superficial reforms to address these concerns, reports indicate that IP violations remain rampant, particularly in sectors like semiconductors, pharmaceuticals, and automotive technologies. For example, according to the US government estimates, intellectual property theft linked to China costs the American economy up to $600 billion annually. As a result, Western firms, particularly those in high-tech industries, find themselves in a precarious position: either comply with China’s demands and risk losing control over their innovations or forgo access to the world’s largest consumer market. Ultimately, this systematic exploitation undermines fair competition and discourages foreign investment.
Trade Surplus and Currency Manipulation
In addition to unfair trade practices, China’s massive trade surplus with major economies, especially the United States and the European Union, is often attributed to its controversial currency management. While Beijing officially denies allegations of currency manipulation, economic data suggest otherwise. Undoubtedly, by deliberately keeping the Yuan artificially undervalued, China makes its exports cheaper and more attractive to foreign buyers while making imports into China more expensive. This strategy – in turn – contributes to persistent trade imbalances, which fuel tensions with trading partners. In response, the US and other economies have imposed tariffs and trade barriers to counteract China’s currency tactics, but these measures often escalate into broader trade disputes instead of resolving the underlying issue. Hence, until China allows its currency to float freely according to market forces, its trade surplus would continue to distort global trade dynamics.
Geo-economic Leverage and the Belt and Road Initiative
Moreover, China’s Belt and Road Initiative (BRI), lauded as an ambitious global infrastructure project, has drawn scrutiny for its strategic economic and geopolitical implications. Indeed, while Beijing presents the BRI as a win-win for developing nations, its lending practices have raised alarms over ‘debt-trap diplomacy.’ Notably, several countries participating in the BRI have found themselves burdened with unsustainable debt and forced to surrender strategic assets or grant China greater geopolitical influence in exchange for financial relief. For instance, Sri Lanka’s loss of Hambantota Port to Chinese control is a glaring example of how Beijing leverages economic dependence for strategic gains. As a result, instead of fostering economic development, China’s trade and investment policies often prioritize political leverage over genuine partnerships, thereby increasing global economic instability.
Selective Market Access and Non-Reciprocal Trade Policies
Last but not least, China’s trade policies are characterized by a one-way openness, where foreign markets remain largely accessible to Chinese companies, but Beijing imposes strict barriers against foreign firms in key sectors. Despite its commitments under the World Trade Organization (WTO), China maintains high tariffs, investment restrictions, and opaque regulatory frameworks that disadvantage international businesses. For example, while Chinese companies like Huawei and TikTok operate freely in Western markets, equivalent access is not granted to Western tech firms in China. Thus, the restricted access to China’s digital economy; financial services; and manufacturing sector exemplifies this imbalance, frustrating foreign investors and raising concerns about economic nationalism disguised as global integration.
China’s Defense of Its Trade Policies
However, while China defends its trade policies as essential for economic stability and development, it employs its strategic ambitions at the expense of global trade fairness. Moreover, state subsidies and protectionist measures grant Chinese firms an unfair advantage, undercutting foreign competitors who lack similar support. Additionally, market restrictions and forced technology transfers further distort competition, contradicting the principles of free trade. By doing so, China never brings sustainability but exacerbates trade imbalances and undermines a rules-based world order. Ultimately, by prioritizing national dominance over fair competition, China’s policies disrupt international markets and challenge the foundations of an equitable global economy.
Finally, China dismisses accusations of geoeconomic coercion by claiming that BRI projects are mutually beneficial and not designed to trap nations in debt. Furthermore, it argues that infrastructure financing is a necessary risk for progress and that countries willingly participate. Additionally, Beijing insists its trade surplus stems from efficiency, not manipulation. However, this overlooks how China strategically uses debt to expand its influence. Moreover, state-backed advantages distort competition, granting Chinese firms an unfair edge. Thus, by prioritizing control over fairness, China’s policies reinforce economic dependence and undermine a balanced global trade system, which serves its strategic ambitions at others’ expense.
Balancing Trade Competition and Global Fairness
To conclude, China’s global trade policies reflect an amalgam of economic strategy, state intervention, and geopolitical ambition. While Beijing continues to benefit from its export-driven model, concerns over market distortions; intellectual property violations; and non-reciprocal trade practices remain valid. Therefore, the challenge for global policymakers is to balance engaging with China as a major economic player while ensuring that trade remains fair and transparent. Thus, without meaningful reforms, tensions over China’s trade policies would persist, which shape the future of global economic governance.
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