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China Lowers Legal Standards for International Trade

China Law

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The lack of transparency in the formulation of the rules by which Beijing deals with many of its partners could become the norm, along with the political and legal advantage they provide to the Chinese Communist Party (CCP).

In addition to the costly credits and diplomatic support China adds to its Belt and Road initiative, the legislation takes an important seat at every signing of the project, positioning the CCP as the regulator and promoter of new rules and putting at risk the national security of countries and individuals the Chinese regime may pursue.

Unlike the legal platforms employed by the United States “in the form of bilateral investment,” teaties (BITs), free trade agreements, or the multilateral rules of the World Trade Organization, most Belt and Road projects are informal, “partnership-based or relational, rather than rule-based.”

As a result, countries are subject to rules created individually by Beijing in trade, financial and investment matters. Taking into account, in addition, political and diplomatic transactions that strengthen the CCP.

Although the scheme has international arbitration tribunals, many of the contracting companies have the backing of the Chinese government and analysts fear that Beijing could take cases to its own courts.

Ken Hu, rotating president of Huawei, speaks at the opening ceremony of MWC (Mobile World Congress) Shanghai 2021 in Shanghai, China. (Image: EFE)

Refugees and victims are concerned about the absence of the United States and Europe in the formulation of these rules, as Belt and Road contemplates a 5G technological structure for the partner countries, which in turn allows Chinese companies providing the network to access user information.

The commercial and technical rules are shaped in such a way that China is favored, and the use of data and technological developments, as well as the collection of information, are conducted by Chinese companies, which are accountable to the CCP regime, and don’t have an American or Western competitor in the way.

Belt and Road initiative

China’s Belt and Road initiative was heavily criticized by the Donald Trump administration, which denounced the high costs in credits granted by Beijing to developing countries for infrastructure development.

However, there is still no detailed plan to compete against Beijing, which launched Belt and Road in 2013 and already has 140 partner countries. For the West, especially for the United States, it is of vital importance to develop a plan that is competitive with the Chinese one.

Faced with this scenario, Joe Biden’s government suggested to British Prime Minister Boris Johnson that countries should have an infrastructure plan to rival China’s initiative.

“I suggested we should have, essentially, a similar initiative coming from the democratic states, helping those communities around the world that, in fact, need help,” Biden said.

Biden speaks during his first formal press conference in the East Room of the White House, March 25, 2021. (Image: EFE)

With the Belt and Road, the Asian giant aims to create the world’s largest trade network and is promoting heavy investment in physical and digital infrastructure to countries seeking to take advantage of the ambitious plan.

The initiative was booming until before the pandemic, when most countries embraced China because of its growing market and the technological advances it offers at low cost. The coronavirus pandemic (COVID-19), the trade war with the United States and sanctions for intellectual property theft, human rights and national security made China’s plans doubtful for many countries after 2020.

Italy is one of China’s main allies in the Belt and Road initiative. Chinese Foreign Minister Wang Yi (L) and his Italian counterpart, Luigi Di Maio, during a joint press conference. (Image: EFE)

The UK, Sweden, Australia, among other countries, vetoed Huawei’s 5G networks citing national security. Allegations of information theft by the Chinese company and pressure from the United States had an effect in achieving a clean network.

Now, after the work initiated by the Trump administration against China’s plans, Biden and Johnson seek to stop the CCP, which with credits, infrastructure and technology aims at world leadership by expanding a strong nationalism and a development based on rules made by Beijing.

Camilo Bello is a consultant focused on Asia Pacific studies and has experience in strategic management. He has studied law in Colombia and is currently pursuing studies in language and history at National Taiwan Normal University. He has collaborated with Students for Freedom in Hong Kong and Taiwan // Camilo es consultor enfocado en estudios de Asia Pacífico y experiencia en gestión estratégica. Cuenta con estudios en Derecho en Colombia y actualmente se encuentra realizando estudios en lenguaje e historia en National Taiwan Normal University. Colaborador de Estudiantes por la Libertad en Hong Kong y Taiwán

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