China’s developing-country status: an anachronism in 2025?

This contribution is the first in a series of analyses by Thomas Deconstanza, exploring China’s developing-country status, its historical roots, and its geopolitical implications. The subsequent analyses will examine the compatibility of this status with current economic realities. The series will conclude with forward-looking reflections on the future of world trade in a rapidly changing governance system.

This piece, on China’s developing-country status, follows on from Thomas Deconstanza’s first report for SKEMA Publika, which focused on the geopolitical transformations influenced by the rise of BRICS+ and PIIGS.

Introduction

On 11 December 2001, after fifteen years of negotiations, China officially joined the World Trade Organization (WTO) as a “developing country”. This status, obtained through self-declaration, gave China access to the WTO’s “Special and Differential Treatment” (SDT) provisions, designed to support the least advanced economies in their integration into international trade flows. Twenty-four years on, the country’s evolution is astonishing. China has become the world’s second economic power, a major industrial and technological player, and a central pillar in the geopolitical realignments of the 21st century, using approaches such as sharp power¹ to position itself as an alternative to the Western model of society. Sharp power is defined as a country’s ability to undermine and weaken another country’s political system through manipulation².

This incompatibility between the country’s current economic reality and a status inherited from the past raises questions. Can China still be considered a developing country? To what extent should international rules adapt to this new situation? Is China’s case unique, or does it foreshadow a wider reconfiguration of the multilateral trading system, as advocated by the BRICS countries? Because beyond the case of China, it is the governance of the WTO, and more broadly of international economic institutions, that is on shaky ground³.

The growing tensions between Beijing and Washington, particularly regarding tariffs and the reshuffling of global value chains, only serve to rekindle these debates. They extend a logic initiated under Barack Obama with his “Pivot to Asia”⁴ strategy, and intensified under President Trump, who has challenged the balance of multilateral institutions head-on⁵ by imposing a logic of unabashed power politics on the world stage. This deterioration of international balance was notably illustrated by the Sino-American escalation of tariffs, which rose to 145% for the United States and 125% for China in April 2025⁶.

To understand the extent of the strategic ambiguity surrounding China’s current status, we will first review the country’s recent history, its model, and how it uses its developing-country status. We will then analyse, from a comparative perspective, whether this status remains compatible with current economic realities and with the alliances between China and its partners. Finally, in the third section, we will look to the future: how can China’s trading partners – both Western and emerging – adapt their strategies in a rapidly changing governance system?

China: a country that has come (back) a long way

The economic miracle that is China

History of Den Xiaoping’s economic reforms to modernise China

After almost three decades of Maoism, China was a poor, technologically backward, and institutionally disorganised country when Mao Zedong died in 1976. In 1978, its GDP per capita was estimated to be between 200 and 400 US dollars, one of the lowest in the world according World Bank and OECD data, compared with 19,500 US dollars in France and over 30,000 US dollars in the United States⁷. The vast majority of China’s population of 956 million lived in rural areas due to the country’s low level of urbanisation and as a consequence of the Cultural Revolution, which took place from 1966 to 1976. During this period, 20 million young Chinese were forcibly sent to the countryside to perform manual labour and reconnect with the revolutionary ideal. Despite this, the average agricultural yield remained below two tonnes of cereals per hectare, far below international standards. In contrast, the agricultural yield in the United States was over 5 tonnes per hectare at that time⁸.

Chinese industry was dominated by low-productivity state-owned enterprises, and the economy suffered from a lack of investment. Foreign trade was minimal: in 1978, China accounted for less than 1% of world trade⁹. Infrastructure was underdeveloped: the country had only around 52,000 km of railways for an immense territory of 9.597 million km², and asphalt roads were rare¹⁰.

Politically, the country was dominated by a collectivist ideology that forbade private initiative, and the economy was planned over a five-year period with little flexibility. Following the death of Mao Zedong, China underwent a political transition marked by internal struggles within the Communist Party. Deng Xiaoping, a Chinese Communist Party apparatchik, gradually established himself as the central leader by marginalising the proponents of the Cultural Revolution, and particularly the Gang of Four, four Chinese leaders close to Mao Zedong. Deng Xiaoping also garnered support by consolidating a consensus around the idea of modernising the country¹¹.

In 1978, at the Third Plenum of the 11th Central Committee, Deng Xiaoping came to power and launched an ideological reappraisal of Mao’s achievements. He decided on an ambitious reform plan known as the “Four Modernisations”, targeting agriculture, industry, science and technology, and national defence, with the aim of catching up to other countries¹². A pragmatist to the core, one of his philosophical maxims was “it doesn’t matter whether a cat is black or white; if it catches mice, it’s a good cat”¹³.

From economic dwarf to workshop of the world

Chinese growth since the reforms initiated by Deng Xiaoping in 1978 has been unprecedented. The transition from a rigidly planned economy to a “socialist market economy” resulted in an average annual growth rate of over 9% for more than three decades¹⁴. This rapid development began with institutional change and was accelerated by the Chinese government’s liberalisation of agricultural prices and the return of more than 20 million young people to the country’s cities after the end of the Cultural Revolution¹⁵. With it came a significant reduction in poverty. According to the World Bank, more than 800 million Chinese were lifted out of poverty between 1980 and 2020¹⁶.

These reforms dismantled the centralised economic system inherited from the Maoist era, paving the way for a socialist market economy characterised by a gradual opening-up to international trade and foreign investment, a decentralisation of economic decision-making, and by granting the Chinese access to property ownership. The creation of numerous Special Economic Zones (SEZ), which attracted massive foreign direct investment (FDI), is a prime example of these liberalisation reforms. The city of Shenzhen is a case in point, evolving from a fishing town in 1980 to a globalised metropolis. These coastal areas have become the symbol of factory cities/megalopolises. In 2021, there were more than 2,500 Special Economic Zones in China¹⁷.

Considered “the workshop of the world” or “the world’s factory” since the 2000s¹⁸, the country used its accession to the WTO to attract manufacturing industries and move up the value chain by acquiring cutting-edge technologies. This industrialisation enabled China to become the world’s second largest economy, transforming its urban landscape and improving the living standards of hundreds of millions of its citizens. As a World Bank report explains, “China’s success in reducing poverty over the last three decades has been remarkable and is well recognised globally. The number of poor in China living on less than $1.25 per day fell from 835 million in 1981 to 208 million in 2005”¹⁹.

Of course, not all parts of Chinese society have benefited from this growth, and certain successes must be put into perspective²⁰. Initially, it was rural areas that benefited most from the reforms, but they were soon abandoned in favour of the coastal cities, thus widening the rural–urban divide. According to Statista, in 2023, people living along the country’s urbanised east coast had 1.6 times more disposable income than those living in rural areas in western China²¹. Furthermore, the absence of political reforms led to mounting social tensions, as evidenced by the Tiananmen Square protests of 1989. Finally, facilitated by a form of economic decentralisation, corruption within local Party structures increased as the economy grew and foreign capital flowed in, exacerbating socioeconomic inequalities²². Hence, the Chinese economic miracle should be considered from the perspective of wealth distribution among the population.

China wants to forget the century of humiliation and return to its former greatness through a new policy that distinguishes it from the West.

We have just seen how the reforms initiated in the late 1970s led to strong growth and to China’s return to the international stage. Since the early 1990s, Chinese history textbooks have compared this period of growth with “the century of humiliation”. Frequently used in contemporary Chinese political discourse, this expression refers to the period from 1839 to 1949, which was marked by foreign military interventions, defeats, and unequal treaties. During this time, China lost sovereignty over certain territories and was forced to pay substantial financial compensation to nations such as the United Kingdom, France, and Japan. China’s status on the world stage diminished considerably. This decline began with the First of the two Opium Wars, which led to the cession of Hong Kong to the United Kingdom. It continued with the Boxer Rebellion (1899–1901), which led to further reparations being imposed on China, and it ended with the establishment of the People’s Republic of China in 1949. Based on historical facts, this period is now central in China’s collective memory, particularly since it was reincorporated into school textbooks in the 1990s. Since 2001, the National Museum of China in Tiananmen Square has housed a permanent exhibition entitled “The Road to Rejuvenation”, retracing the history of China since the Opium Wars. This exhibition serves to fuel a historical narrative based on national rebirth and rediscovered pride.

 In 2014, Xi Jinping declared that the Chinese people would never forget the humiliations of the past. This official narrative aims to reinforce national unity and legitimise the current geopolitical ambitions of the president or the country. There are several examples of this in both domestic and foreign policy.

On the domestic policy front, in his first official speech as head of state, Xi Jinping said he would fight for the “great renaissance of the Chinese nation”²³. The use of this renaissance and of the need to resist against outside interference was a way for Beijing to protect itself from international criticism. On the foreign policy front, China, which has claimed sovereignty over Taiwan since 1949, shifted its discourse from seduction to intimidation, and this “reunification” now became a historic mission aimed at closing the century of humiliation. This argument was also used to justify the handover of Hong Kong and Macau in 1997 and 1999, respectively²⁴.

Opinions are divided on China’s “developing country” status

Entry into the WTO

China joined the WTO²⁵ in December 2001, marking a major turning point in the history of international trade²⁶. As the 143rd WTO member, China committed to aligning its economy with the rules of multilateral trade. This accession was hailed as a historic moment for both China and the WTO, due to the scale of the economic and legal reforms undertaken by Beijing to comply with international standards and, more importantly, due to the major economic opportunities it opened up for China. Joining the WTO meant lower tariffs for exporters and for trading partners, who would eventually gain access to the Chinese domestic market and its one billion consumers.

Developing-country status

When China joined the WTO, it declared itself a developing country. Paradoxically, this is a vague term within the international organisation, as the classification is not based on strictly defined criteria. Instead, it relies on subjective self-declarations by countries wishing to be recognised as developing nations. In other words, a country is considered to be developing if it considers itself to be so²⁷. By declaring itself a “developing country” (DC), China could benefit from the WTO’s Special and Differential Treatment (SDT) provisions. This status has enabled China to benefit from extended deadlines for implementing agreements, increased technical assistance, and weaker or less binding commitments. However, it is important to contextualise China’s position, given that, in reality, two-thirds of WTO member countries claim to be developing, including India and Brazil.

SDT gives China three significant advantages in global economic competition. Firstly, the country is granted extended deadlines for aligning its national policies and laws with WTO rules. This extra time enables China to maintain protectionist policies, with heavy industrial subsidies in sectors such as telecommunications. Secondly, China can maintain certain export subsidies for its strategic industries. An example of this is Chinese electric cars, which are now heavily subsidised by the state²⁸. Thirdly, thanks to the Generalised System of Preferences (GSP), China has benefited from simplified access to the markets of developed countries, such as the United States and the European Union²⁹, especially over the decade spanning 2001 to 2011. The GSP enables China to export to developed countries duty-free, and the system is non-reciprocal³⁰.

China’s Special and Differential Treatment status criticised by Westerners, who see it as anachronistic.

China’s accession to the WTO and its status as a developing country were not contested on the international stage, at least not before 2010.  There were two main reasons for this. Firstly, China’s economic situation was still perceived as fragile. While the country had enjoyed strong growth, value added remained low and wide socioeconomic disparities persisted. Secondly, the fact that two-thirds of the WTO’s member countries had designated themselves as developing countries, including India, Brazil and Russia, which self-declared as a DC in 2012.

Criticism of the legitimacy of this status mainly came from the European Union and the United States, the main markets for products from China. The debate intensified and became a political priority following Donald Trump’s election as President of the United States. In 2017, President Trump openly criticised the WTO and accused China of gaining unfair advantages from multilateral trade rules: according to the World Bank, China had been the world’s second-largest economic power in terms of overall GDP since 2010. This criticism of the WTO reached its peak in 2019, when the United States published an official memorandum entitled “Memorandum on Reforming Developing-Country Status in the World Trade Organization”, which proposed automatic criteria for exiting developing-country status and was clearly aimed at China. The memorandum suggested that a country should no longer be considered “developing” once it has achieved a certain level of wealth and economic prosperity³¹. This criticism was echoed by the European Union, South Korea, Australia and Japan. In 2021, the European Commission also included in its trade strategy a call for a new approach to differential treatment within the WTO, to ensure that it reflects contemporary economic realities³².

In short, while structural criticism had emerged in the 2010s, it only became official, open and multilateral in 2018–19, in the context of the trade war and WTO reform. In 2020, Simon Evenett concluded that maintaining SDT in its current form undermined the legitimacy of the WTO and exacerbated tensions between developed and emerging countries, targeting the huge competitive advantage used by China, in particular³³. However, Beijing does not see the situation in the same light.

 The Chinese see any attempt at reform as manipulation by the West.

China’s arguments.

China disagrees with this assessment and is reacting by using three levers. The first lever is legal and relates to the very nature of the WTO. Within the framework of the international organisation, China considers special and differential treatment (SDT) to be a fundamental right of developing countries. This is indeed the case, and the self-declaration principle was established and implemented prior to China’s accession to the WTO in 2001. China asserts that any attempt to redefine or restrict this status would violate the principles of fairness that underpin the multilateral trading system. The second lever is ideological. The West’s attempts to reform the developing-country status within the WTO are perceived as a strategy to limit China’s economic and political rise. This argument echoes the language of the “great renaissance” promoted by Xi Jinping. It is also fuelled by the rhetoric according to which the Chinese people will no longer have laws or treaties imposed on them by foreign countries, especially Western ones, or by international organisations, which are perceived as being run by the West. The third lever is economic. China emphasises that, despite being the world’s second largest economy in terms of overall GDP, it still lags behind in terms of GDP per capita, with rural areas facing significant development challenges. Beijing insists that these unequal socioeconomic realities justify its developing-country status, and that maintaining this status is essential if the country is to pursue balanced development.

The BRICS members’ position regarding China’s status

Like China, all the BRICS nations declared themselves to be developing countries as soon as they joined the WTO. South Africa, Brazil and India did so in 1995, China in 2001, and Russia in 2012³⁴. At the 16th BRICS Summit, held in Kazan in 2024, the leaders reaffirmed their support for an open, transparent, inclusive, and rules-based multilateral trading system, as embodied by the WTO³⁵. In particular, they emphasised the importance of preserving the fundamental principles of the WTO, including SDT, which facilitates the economic growth and development of member countries, particularly developing countries (DC) and least developed countries (LDC). The BRICS countries also called for a necessary WTO reform to increase its effectiveness in meeting global economic challenges. They reiterated the need for the WTO to evolve and insisted on the importance of appointing new members to the Appellate Body. This body, composed of judges chosen by the organisation, is responsible for adjudicating trade disputes within the WTO framework. However, the United States, which had previously benefited from this structure, is now impeding the membership changes required to maintain a two-tier dispute settlement mechanism accessible to all³⁶. Historically, China, Brazil and India even joined forces in a group called “BIC” in order to vote on numerous rules within the WTO.

However, beyond this façade of unity, certain topics reveal signs of friction within BRICS, as its members compete with each other in certain markets. We will illustrate this competition by analysing the cases of fisheries and electrical components. The former causes friction between China and India, while the latter is an area in which Russia and Brazil have adopted a different approach to Beijing.

Fishery subsidy negotiations: China isolated because it is too powerful

China, the world’s largest subsidiser of fisheries, providing over seven billion US dollars, insisted on benefiting from the SDT reserved for developing countries. However, India, whose fisheries are poorly subsidised and less modern, and Brazil, which wants to develop its fishing sector, were reluctant to accept this. These two countries proposed criteria that would effectively exclude China from these advantages, even if it meant blocking certain bills at the WTO³⁷. During the negotiations, India called for a ban on subsidies for deep-sea fishing, directly targeting China. This strategy aimed to preserve their own access to SDT while distancing themselves from China’s controversial practices. On this issue, at least, Western countries are not alone in finding China’s status as a developing country problematic.

E-commerce: strategic differences

In e-commerce, China is seeking to establish rules that align with its interests, particularly with regard to data flows and digital sovereignty. Indeed, Beijing wants to exploit its position as the world’s co-leader in digital infrastructure and cybersecurity alongside the USA, even if it means disadvantaging some of its less prepared BRICS partners. India and South Africa have refused to participate in the plurilateral discussions, fearing that these rules could undermine their digital development policies. As in the fisheries sector, a divergence of interests and strategies among non-Western countries is noted here, in opposition to China’s strategy of protecting its economic interests through the developing-country status.

More telling still: the abandonment of the BIC alliance (Brazil-India-China)

Historically, China, India and Brazil formed a strategic alliance within the WTO to defend SDT. However, under pressure from developed countries, particularly the United States, this alliance crumbled. Brazil was the first to distance itself, in 2019, no doubt as a result of pressure from the United States, with which trade and good relations became a priority. In 2024, trade between the two countries was estimated at 92 billion US dollars³⁸. In 2020, it was India’s turn to distance itself, leaving China isolated on the issue of SDT. This breakup highlighted the growing divergence between the commercial interests of these emerging countries³⁹.

In reality, China is employing a dual strategy: claiming developing-country status in order to benefit from SDT in sectors such as agriculture, while agreeing to forego certain advantages in other areas, such as fisheries subsidies, when this serves its interests. This pragmatic approach contrasts with the more rigid position of India, which, as Till Schofer explains, tends to “portray SDT as an inalienable right”⁴⁰.

What about BRICS+? Is it an opportunity for China?

The addition of four new members in 2024 has further increased the BRICS countries’ capacity for economic, military and cultural influence within international institutions. As described below by Christophe Ventura, Director of Research at the French Institute for International and Strategic Affairs (IRIS), the influence of the BRICS countries on international relations could take two forms⁴¹.

“By evolving into BRICS+, the BRICS countries are seeking to continue a process of building an international space which can be oriented towards two possible plans for the future, depending on what changes occur in international realignments and power relations. The first consists in positioning BRICS+ as the instrument of a negotiation aimed at imposing a multipolarity that aligns with their interests. The second is to gradually form a counter-hegemonic alliance uniting, around China (and Russia, secondarily), a coalition of countries reluctant to accept the domination of the United States and of other Western powers aligned with the policies of the world’s leading power.”⁴²

On the one hand, China’s influence has clearly increased with the development of BRICS+, as Beijing is rallying a group of Global South countries behind its vision of a multipolar world that challenges Western hegemony. On the other hand, the crumbling of the BIC group and the positions taken by Brazil and India showed that China’s pragmatism has its limits. Now that Beijing’s use of the developing-country status is being challenged within BRICS+, it is legitimate to wonder whether it might be undermined by the other WTO members too. These examples illustrate the growing tensions within BRICS+ over China’s status at the WTO. While China seeks to maintain its advantages as a developing country, other members are questioning this position. This highlights the challenges in achieving consistent cooperation within the group.

The BRICS+ countries’ ability to maintain a cohesive stance on WTO reform over the coming years will be of paramount importance to China and to the BRICS+ nations as partners. By focusing on common objectives, namely the fight against Western hegemony, embodied by the United States, China can have it both ways. In other words, it can maintain this pragmatic approach to SDT which enables it to benefit from the advantages of developing countries in certain areas, while also advocating for WTO reform.

 Conclusion of Part One

In this first part of the series, we began by analysing China’s evolution since 1978. Starting from a position of poverty, with little in the way of industry, China’s steady, albeit unevenly distributed, economic growth has enabled it to become the world’s second-largest power. This growth was made possible by internal factors, namely the policies initiated by Deng Xiaoping, such as opening up to foreign investment through the creation of Special Economic Zones. This integration into the global economy was underpinned by two pillars. Firstly, China’s ability to become a great power once again, without allowing itself to be dominated by the Western countries that had impoverished and humiliated it in the past. This is demonstrated by its use of SDT within the WTO framework, which has supported the country’s international development since 2001. Secondly, alliances formed with other countries, such as those in the BRICS group, which are helping to spread anti-Western influence around the world. The challenge for China in 2025 is to be able to continue to pragmatically avail itself of WTO rules. In other words, to continue to be considered a developing country, while being more and more open about its geopolitical ambitions, even if this means harming its BRICS partners and irreversibly pushing bodies such as the WTO to change the status of developing countries.

While there are still certain objective economic reasons that allow China to legitimately remain a developing country and benefit from the advantages of SDT, such as wide regional disparities, these reasons are becoming fewer and fewer as China grows and progresses towards its ambition of becoming the world’s leading power. It is above all the position of China’s BRICS partners that will determine whether or not it can continue to benefit from this hybrid status, which has become a driver of economic development.

In the second part of this series, we will examine how Xi Jinping’s ambitions shed light on China’s true intentions, and how these fit in with China’s special status in the WTO, but also with the BRICS+ partner countries and other developing countries in Africa and Asia. We will also analyse the levers that Western countries and international organisations can use.

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36. This call for a change in the members of the Appellate Body is mentioned in the minutes of the BRICS summits of 2022, 2023 and 2024. ↩︎
37. “India blocks – once again – WTO fish subsidies agreement”, Europeche, 2 March 2024 ↩︎
38. Brazil. (2025). United States Trade Representative. https://ustr.gov/countries-regions/americas/brazil ↩︎
39. Kristen Hopewell, “How China lost its wolf pack: the fracturing of the emerging-power alliance at the WTO”, International Affairs, Volume 98, Issue 6, November 2022. ↩︎
40. Till Schöfer, “Developing-country status at the WTO: the divergent strategies of Brazil, India and China”, Indian Strategic Studies, 7 December 2022 ↩︎
41. Deconstanza, T. (2024). From BRIC to BRICS+: how to go from a simple acronym to a partnership capable of overthrowing the world order in 25 years SKEMA Publika https://publika.skema.edu/from-bric-to-brics/ ↩︎
42. Ventura, C. (2023). BRICS+ : VERS UN MONDE PLUS MULTIPOLAIRE ?. IRIS. https://www.iris-france.org/wp-content/uploads/2023/12/Note-AFD-BRICS-D%C3%A9cembre-2023.pdf ↩︎