Book Review: Between Market Economy and State Capitalism: China’s State-Owned Enterprises and the World Trading System by Henry Gao and Weihuan Zhou

China’s economy has grown steadily despite the rise and fall of globalism and antiglobalism in the past two decades. Its Western trading partners often criticize its manipulation of trade practices through the so-called state capitalism model. As the United States and others claim, China has successfully emerged as the largest trader in the world. ‘Yet, having the right elements can only guarantee a nice story, not the correct answer’ (p. 2). This book sets out to investigate the relationship between China’s state capitalism and WTO rules, offering recommendations for further promoting world trade rules and practices. The book consists of eight chapters. Chapter 1 presents the background of the book by providing definitions of some key concepts such as state capitalism and state-owned enterprises (SOEs) and introducing the challenges posed by SOEs to the global trading system. Chapter 2 reveals how the Chinese government has enhanced its influence over SOEs. Chapter 3 debunks the myth of China’s state capitalism. WTO members have been well aware of the clashes between WTO rules and China’s state capitalism since the very beginning. Bearing these problems in mind, WTO members have carefully crafted practical solutions to reinforce a category of WTO rules in order to discipline ‘market-distortive behaviours of SOEs and subsidies that enhance their competitive advantages’ (p. 10). These solutions are discussed in Chapters 4 and 5. Recent rulings by the Appellate Body have contributed to the ‘softness’ of WTO rules, because of which the crafted solutions as discussed in Chapter 4 are all of limited utility. To rebut the claim that all WTO rules are useless, the analysis in Chapter 5 underlines the promising potential of some China-specific rules in the original Agreement on Subsidies and Countervailing Book reviews