Freeland Criticizes China's Economic Strategy, Calls WTO Entry a Mistake

Jul 14, 2024

Canadian Deputy Prime Minister Chrystia Freeland recently delivered sharp criticism of China’s economic policies, comparing them to Leninist principles, and urged Western nations to recognize the strategic threat posed by China’s economic strategies.

In her latest statement, Freeland said: “I see Leninist principles in China’s economic policy—the aim to dominate the commanding heights of the global economy and deliberately weaken and exclude Western competitors. I believe it is time for us to wake up to this reality.”

Freeland’s remarks underscore the growing concerns among Western leaders about China’s state-driven economic practices. She emphasized the crucial role of labor in this dynamic, noting: “For me, labor is a very important piece of the puzzle, and I think now is the time. China is a centrally planned communist economy, and it is consciously and state-led in pursuing policies of overcapacity.”

Freeland further elaborated on the geopolitical and geoeconomic shifts, stating: “Geopolitics and geoeconomics are back. This means that Western countries—primarily the United States—are beginning to prioritize secure supply chains and adopt a different attitude toward China’s overcapacity, which means Canada plays an increasingly important role for the U.S.”

Freeland also touched on the increasingly popular view in global trade discussions that allowing China to join the World Trade Organization (WTO) more than two decades ago was a mistake. She pointed out that it is now widely believed that granting China WTO membership was an error, hinting at the challenges posed by China’s economic rise and its impact on the global trade system.

Background Information

China’s accession to the WTO in 2001 marked a significant step in its integration into the global economy. However, as China’s economy rapidly ascended, controversies surrounding its trade practices and economic policies also grew. China’s state capitalism model, including massive support for state-owned enterprises and the use of subsidies to achieve overcapacity, has led to unfair competition in global markets. Industries such as steel, aluminum, and solar panels have been particularly affected, with Chinese overcapacity exerting enormous pressure on global markets, leading to price drops and undermining the competitiveness of companies in other countries.

Western nations, particularly the United States, have expressed increasing concern over China’s economic strategies. These concerns encompass not only trade practices but also technology transfer, intellectual property protection, and cybersecurity. In recent years, the U.S. government has implemented a series of measures, including tariffs, export controls, and investment restrictions, to address the challenges posed by China.

Freeland’s criticism adds to the growing chorus of voices in the West calling for a reevaluation of economic and trade relations with China. As countries work to counter the effects of China’s economic policies, Freeland’s remarks may serve as a catalyst for a stronger and more coordinated response to protect economic interests and ensure fair competition in global markets.

(This article references reporting from Radio France Internationale)