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The Communist Party of China’s socialist market economy has ensured a safety net for indigenous corporations and allowed them to have an unfair advantage compared to their overseas
competitors. The US claims since China became a member of the World Trade Organisation in 2001 it has exploited a loophole in the rules of the World Trade Organisation by providing subsidies
to its own companies that have distorted trade. EU trade commissioner Phil Hogan said the proposals were “an important step towards addressing some of the fundamental issues distorting
global trade”. Mr Hogan added: “The EU has been arguing consistently that multilateral solutions can be effective in solving these problems.” But how the US, Japan and the EU persuade China
to change it’s systematic support for its own companies is not wholly certain. The US may pursue a more punitive tariffs on Chinese goods, while the EU has instead emphasised the use of
dialogue. The proposal also reiterated a call from the US, Japan and the EU for China to stop forcing foreign companies to share their technology with Chinese partners. Beijing has long
denied it forces foreign companies to give up technology. They do it willingly, Beijing asserts, to get access to China’s vast and growing market. This announcement by the three countries
comes as the US and China begin “phase one” of their trade accord. Today, Director of the National Economic Council Larry Kudlow has claimed the US-China trade deal, “will be good for the
American economy, and the wider global economy”. READ MORE: NORTH KOREA NUCLEAR WARNING: KIM READY TO STAKE CLAIM, WARNS EXPERT The deal is expected to bring the world’s two largest
economies back on track to stable and sound development. The hard-won text involves nine chapters, touching sectors such as intellectual property rights, technology transfer, food and
agricultural products, financial services, exchange rates and transparency, trade expansion as well as bilateral assessments and dispute settlement mechanisms. Gao Lingyun, an expert at the
Chinese Academy of Social Sciences in Beijing speaking to the Global Times said: “The phase one deal, which is signed based on an equal footing, is in the interests of both countries and
will be a constraining force on both China and the US.” As the two reached consensus on the phase-one deal, the US agreed to lower tariffs on $120 billion (£92 million) worth of Chinese
products to 7.5 percent from 15 percent, but a 25 percent tariff remains on roughly $250 billion (£191 million) worth of Chinese products. The US also rolled back plans to impose tariffs on
all additional imports. Mr Gao added: “The tariffs will be further scrapped when negotiations in the upcoming months run smoothly.” The economy of China has transitioned from a
centrally-planned system to a more market-oriented economy, which currently ranks as the second largest in the world by nominal GDP and the largest in the world by purchasing power parity.
China has the world's fastest-growing major economy, with growth rates averaging 6 percent over 30 years. Due to historical and political conditions of China's developing economy,
being a socialist-market economy China's public sector accounts for a bigger share of the national economy than the burgeoning private sector. The country has natural resources with an
estimated worth of $23 trillion (£17.6 million), 90 percent of which are coal and rare earth metals.