How China's Employment Problems Became Trade Problems

Abstract

This article focuses on the potential trade spillovers of Chinese policies to maintain employment and discusses how nations might work collaboratively at the WTO to address this problem. Chinese leaders are determined to maintain employment and have long ignored Chinese employment laws (as well as international law) that could empower workers. Chinese leaders have not made sufficient effort to either educate workers and managers about their rights and responsibilities under the law (demand side of the law) or to educate policymakers throughout China as to their enforcement obligations under the law (supply side). The failure to enforce these laws has distorted trade. Norms regarding the rule of law underpin the GATT/WTO but they are implicit. China became the first (but not only) nation to have explicit rule of law obligations. China was “required to enforce the rule of law throughout all of its territories.” I suggest a way in which WTO members can address this problem and at the same time provide incentives to China to improve its rule of law.