Central-Provincial Dynamics in China's WTO Disputes: 'Local Protectionism' versus International Pressure

Abstract

The Chinese term 'local protectionism', refers to China's uncooperative local governments and pertains to the study of China's central-local relations. This internal issue of China's state structure has attracted the attention of WTO scholars with China's WTO accession. At the time China joined the WTO, many scholars expressed their concern that China's compliance with WTO obligations might be hindered by hard-to-control local governments. However, this research topic of the interface between China's local governments and China's WTO obligations has not been followed up by scholars due to the lack of research data. This thesis looks outside the box and develops an innovative approach to study how WTO disputes prompt the Chinese central government to discipline uncooperative local governments and combat local protectionism.

In conducting such an innovative research approach, this thesis combines two domains of study: China's interactions with the WTO Dispute Settlement System (DSS) and China's central-local relations. The first study domain finds that China has extensively reformed its domestic governance to implement WTO judicial rulings. This background view reveals that China's domestic governance is subject to WTO's influence, and builds the foundation for understanding China's internal central-local governance change under the impact of WTO disputes. The second study domain reviews how the Chinese central government combats local protectionism. This domain of study identifies that, China's central-local dynamics are informal and political, rather than formal and legal. Within China's vague constitutional framework, the Chinese central government primarily checks local protectionism through political interaction with provincial governments.

This innovative combination of two domains of study, China's interactions with the WTO DSS and China's central-local relations, mutually establishes a pattern of international-national-subnational governance impact chain in China. The finding of this pattern develops the research topic on the interface between China's local governments and China's WTO obligations from a unique perspective. By identifying central-provincial political dynamics in selected WTO case studies, this study analyses Chinese central government's voluntary decision to combat local protectionism under pressure arising from WTO disputes, and demonstrates WTO's far-reaching influence on China's internal governance repercussion.