The Committee on Foreign Relations of the U.S. Senate agreed Thursday on a bill (S.308) to terminate China’s status as a developing country. In March, the House passed a highly similar bill (H.R. 1107) 415 - 0 and sent it to the Senate. The recent move by the upper chamber is making the effort even more likely to become legislation.
China rebuked the move on Friday. The Foreign Ministry Spokesperson Wang Wenbin said:
The US is not labeling China a “developed country” out of appreciation or recognition for China’s development success. The real motive behind ending China’s developing country status is to hold back China’s development.
China’s status as the world’s largest developing country is rooted in facts and international law. It’s not something that can easily be wiped away by a US Congressional bill. The rights that China is lawfully entitled to as a developing country will not be deprived just because a few politicians on the Hill say so.
According to some US lawmakers, there is concern that China would use its developing country status to evade international responsibilities. That is completely unnecessary. China’s contribution to global economic growth and UN regular budget and peacekeeping assessments far outweighs that of most developed countries.
It’s not up to the US to decide whether China is a developing country. The US can neither deny the fact that China is still a developing country, nor stop China from moving towards national rejuvenation. Rather than try to figure out how to pin the label of “developed country” on China, the US might want to think about how to remove its own label of a bully and hegemon.
China does benefit from the “developing country”, “emerging market” and “middle-income” status in trade, international preferential loans, and emission reduction obligation.
Developing countries enjoy more preferential conditions in the World Trade Organization (WTO). However, there are no definitions of “developed” or “developing” countries in the WTO’s provisions. In practice, the preference-giving countries decide whether their trade partners are “developed” or “developing.”
The World Bank classifies countries by their per capita gross national income (GNI) levels — low, lower-middle, upper-middle, and high income. A country’s income level will affect the prices of loans from the International Bank for Reconstruction and Development (IBRD) under the World Bank. China, which is a borrower from the IBRD, fell into the upper-middle income category in 2021.
The International Monetary Fund (IMF) divides countries into three groups through its Fiscal Monitor: advanced economies, emerging market and middle-income economies, and low-income developing countries. China is identified as an emerging market and middle-income economy, but it is also an IMF member that bears the third largest member quota, after the U.S. and Japan.
The 2022 United Nations Climate Change Conference or Conference of the Parties (COP27) in Egypt late last year decided to provide “loss and damage” funding for countries affected by adverse effects of climate change. The U.S. and EU pushed China to join them to pay the reparations to developing countries. But China refused. "It is not the obligation of China but we are willing to make our contribution and make our effort," Chinese climate envoy Xie Zhenhua said. According to the U.N., “being part of either developed or developing region is through sovereign decision of a state.”