“A Great Leap in Global Governance: Is China’s ICT Sector Ready?” Scott Kennedy Director Research Center for Chinese Politics & Business Indiana University

China and Global Governance: The Typical Questions Does China play by the rules? Is China meeting its commitments? Why isn’t it meeting its commitments? What can be done to help China meet its commitments? Is China an anti-status quo power?

China and Global Governance: Different Questions “How is China learning the rules?” “How well does China play by the rules?” “How well do different Chinese groups, in and out of government, play by the rules?” “What does greater Chinese playing mean for the rules and the entire game of global governance?” Are others ready for China to play a larger role?

Types of International Economic Regimes Regimes Designed to Serve ProducersConsumers Global Governance Norms and Rules Exist and Have Teeth Trade Remedies - Antidumping - Safeguards - Countervailing measures Technical Standards Intellectual Property Rights Food Safety Product Safety Environment Labor Rights Weak or Non-Existent Foreign Exchange Valuation Foreign Investment - direct - sovereign wealth funds - hedge funds Competition Policy Credit Risk Management

China’s Own Antidumping Regime (product-cases) Year Cases Initiated Chinese Applicants Win Both Sides Win Foreign Respondents Win Total48 21 (44%) 19 (40%) 8 (16%)

A Country’s Standards Pyramid License others to make products based on your standard Cross-license standards access with others Produce and sell products with IP-based standards All standards with intellectual property All of a country’s standards: international, national, company, local

Governance Challenges: Is the market king?

Governance Challenges: Standards and Intellectual Property Rights

Governance Challenges: The National Security Exception

China and Global Governance: Different Questions “How is China learning the rules?” “How well does China play by the rules?” “How well do different Chinese groups, in and out of government, play by the rules?” “What does greater Chinese playing mean for the rules and the entire game of global governance?” Are others ready for China to play a larger role?

China’s WTO Cases: As Respondent Date Initiated Applicants (case #) IssueOutcome Mar 2004USA (309) Value-added tax rebate on semiconductorsChina voluntarily withdrew rebate Mar 2006EU, USA, Canada (339, 340, 342) Auto parts tariffsJuly 08: Panel ruled in favor of US and other applicants. China appealing ruling. Feb 2007USA, Mexico (358, 359) Unfair tax breaks and subsidiesDec 07: Two sides sign MOU. Apr 2007USA (362)Criminal penalties for IPR violationspending Apr 2007USA (363)Distribution of publications in Chinapending Mar 2008USA, EU, Canada (372, 373, 378) Financial information services. Require foreign info companies to disclose proprietary info, use an agent to sell their services. Nov 08: China signs MOU, voluntarily withdraws regulation, establishes new licensing system.

“Global Views 2006,” Chicago Council on Global Affairs, 2006.

China’s WTO Cases: As Applicant Case # Date InitiatedRespondentIssueOutcome 252Mar 02USASafeguard measures to stem surge in imports of foreign steel WTO rules in favor of China and other applicants; US removed the safeguards. 368Sept 07USAPreliminary antidumping and counterveiling duty determinations on coated free sheet paper. US ITC determined no injury in the relevant case. US-China consultations discontinued. 379Sept 08USADefinitive antidumping and counterveiling duties against circular welded steel pipes, off- road tires, and laminated woven sacks. Application of CVD to a “non-market economy.” Consultations pending