ABSTRACT
Since acceding to the World Trade Organization (WTO) in 2001, China’s trade with the world has increased dramatically, but so have complaints about its unfair trading practices. These allegations include differential treatment for domestic and foreign firms, dumping, intellectual property theft, environmental pollution, and unfair labor practices. These concerns have the common denominator that China is trading on terms designed for developed, market economies that respect human rights and the rule of law while simultaneously not following these norms. “Free riding” can describe this behavior of taking a benefit but not contributing to its production. China’s trading partners complain, but seldom take substantive action. Despite this free riding, the mutual gains from trade do exist, leading to a situation in which unfair trade practices persist as China’s trading partners willingly continue to trade. This chapter explains the terms of China’s accession to the WTO, the guiding principles of the WTO, and the complaints against China’s trading practices. From there, it describes the nature of this free riding dynamic and explains the ways in which China does and does not free ride on the surplus generated by international trade.
