How Do You Solve a Problem Like Maria? US – Countervailing Measures (China) (21.5)

Abstract

Abstract The rise of China as a genuine world power, economically and militarily, constitutes the gravest challenge faced by the liberal international order constructed in the aftermath of the Great Depression and the Second World War. A major source of strain in the trade relations between China and the other core members of the liberal world trading system is its extensive use of state-owned enterprises as an instrument of general (domestic) economic policy. This paper builds on Ruggie s theory of embedded liberalism and the theory of economic policy to characterize the political and economic difficulties and opportunities in moving toward a new regime for dealing with subsidies. The conclusion sketches some goals such a regime should seek to embody.