When the People’s Republic of China joined the WTO in 2001 the question of China’s (non) market economy status (NME/MES question) was generally considered as a technical matter of special interest to economists and trade lawyers only. Since 2016, the controversy about China’s NME/MES has, however, been reframed by a more general narrative: the all-encompassing rivalry between Western liberal market economies and so-called Chinese "state capitalism" (also referred to as “China Inc.”). Many policy makers and a large portion of the general public in the West are under the impression that China is altering the rules of the game to the detriment of its trade and investment partners. Especially in the USA, the WTO is criticized for failing to uphold a level-playing-field global trading order. For this and other reasons, the multilateral trade regime in general and the WTO in particular face the biggest challenge for decades.

Joachim Schild and Dirk Schmidt (both from Trier University, Germany) use a political science perspective to analyze and compare how the EU and the USA have updated the toolbox to address these perceived "distortive" Chinese practices. Whereas many of the measures initiated by the USA in the context of the so-called “U.S.-China trade war” have grabbed international attention, the EU on its part has been far from passive. Although the strategies have differed from the USA, as this presentation is going to illustrate, the EU has – often in parallel to or following the USA – also initiated a plethora of measures to address China’s behavior. Comparing the basic approaches towards China’s NME/MES by the EU and the USA, specifically analyzing the policy tools and their effectiveness, can also provide third countries with relevant insights.