New Delhi, 17 June: China’s economic development model is creating significant competitive pressures across the global economy, according to US Trade Representative Katherine Tai, who has also called for reforms to the World Trade Organization (WTO) to address evolving trade challenges.
Speaking in an interview and during a WTO meeting, Tai said the global economy has changed dramatically since the WTO was established, with China’s rise reshaping international trade dynamics.
She noted that China’s economic and trade footprint has expanded significantly since joining the WTO in 2001, creating competitive challenges for many countries. According to Tai, reforming the WTO is essential to ensure the institution remains effective in addressing modern economic realities.
Tai also described the sharp decline in US-China trade during 2023 as a potentially positive sign of global trade diversification. US imports from China fell by 20% to approximately $427 billion, while exports to China declined to around $148 billion. As a result, the US trade deficit with China narrowed to $279 billion.
The decline marked the steepest drop in bilateral trade between the two countries since official records began in 1995. Analysts suggest the trend reflects growing efforts by both economies to reduce dependence on each other amid ongoing geopolitical and economic tensions.
However, experts caution that some Chinese companies may be shifting production to Southeast Asia or routing exports through third countries to bypass tariffs and trade restrictions.
WTO Director-General Ngozi Okonjo-Iweala has warned against a growing split in global trade between rival economic blocs. According to WTO estimates, a fragmented global trading system could reduce global GDP by as much as 5%, posing significant risks to economic growth.
The comments come as both the United States and China seek to expand their economic influence across Asia, Africa and other emerging markets while strengthening supply chains and securing access to critical resources.
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