China is the world's second-largest economy but retains "developing country" status in international organizations
By Eric Revell
March 28, 2023
House committee holds hearing on China
Rep. Mike Gallagher, R-Wis., discusses how witnesses to Chinese concentration camps are being encouraged to tell their story at the House’s hearing on China on ‘The Bottom Line.’
The House passed a bill Monday to revoke the People’s Republic of China’s "developing country" status in international organizations that give it access to preferential loans and other economic benefits.
Introduced by Reps. Young Kim (R-Calif.) and Gerry Connolly (D-Va.), the PRC Is Not a Developing Country Act would make it U.S. government policy to oppose the labeling or treatment of the PRC as a developing country under the terms of any treaty or other international agreement to which the U.S. is a party, such as the World Trade Organization. The House advanced the bill on a unanimous vote of 415-0 after it was considered under the fast-track "suspension of the rules" process, which allows for expedited debate and requires a two-thirds majority for passage.
"The PRC exploits their developing country status by applying for development assistance and loans from international organizations despite spending trillions on infrastructure projects in developing countries as part of their debt trap diplomacy scam, known as the Belt and Road Initiative," Kim said in remarks on the House floor. "In fact, PRC’s withdrawal of loans takes away from actual developing countries and helps the PRC finance its Belt and Road program. We are long overdue to level the playing field."
The U.S. House passed the PRC Is Not a Developing Country Act that would require the State Dept. to push for China's status as a "developing country" in international bodies to be revoked. (Huang Jingwen/Xinhua via AP / AP Newsroom)
Rep. Susan Wild (D-Pa.) added, "I support this bipartisan measure because it deepens both U.S. engagement in international treaties and organizations while trying to effectively counter the PRC’s own self-interested actions in these forums."
The bill would require the State Dept. to advocate for international organizations to change China’s status from a developing country to an upper middle-income country, high-income country, or developed country. That would better reflect China’s status as the world’s second-largest economy, which trails only the U.S. and accounts for about 18% of the global gross domestic product.
Rep. Young Kim (R-Calif.) introduced the PRC Is Not a Developing Country Act with Rep. Gerry Connolly (D-Va.). (Fox News)
The State Dept. would also be tasked with developing a mechanism to change China’s status to that of a developing country if the international body doesn’t currently have such a mechanism. It would also look to ensure that China doesn’t receive preferential treatment or assistance because of its developing country status. The bill would allow the president to waive this requirement if doing so is in the U.S. national interest.
If the PRC Is Not a Developing Country becomes law, it could dramatically erode the benefits China receives in international organizations.
For example, the World Trade Organization gives developing countries "special and differential treatment" intended to increase those countries’ trading opportunities. China’s current status as a "developing nation" also allows it access to development loans from the World Bank’s International Finance Corporation (IFC), some of which have gone to entities enabling human rights abuses by the Chinese Communist Party (CCP).
The issue came up at a congressional hearing last week regarding the CCP’s ongoing genocide against China’s Uyghur minorities in Xinjiang.
Nury Turkel, chair of the U.S. Commission on International Religious Freedom, noted "The World Bank and IFC have been funding entities that are building those camps" through funding those bodies provided to "an entity called the XPCC, Xinjiang Production Construction Corps" that has been sanctioned by the U.S. and European Union. Turkel added that the XPCC "is also largely responsible for the ongoing forced labor practices."
It’s unclear at this time whether the PRC Is Not a Developing Country Act will be considered in the Senate, where Sens. Mitt Romney (R-Utah) and Chris Van Hollen (D-Md.) introduced a similar bill known as the Ending China’s Developing Nation Status Act.
However, the bicameral and bipartisan support for the U.S. to take action on the issue reflects a growing bipartisan consensus in Congress that the U.S. needs to take a much tougher stance on China than it has in the last few decades.
In early January, more than two-thirds of House Democrats voted with Republicans to establish a new House committee to examine America’s strategic competition with China, and many voted to block the sale of oil from the Strategic Petroleum Reserve to Chinese entities.
Fox Business’ Peter Kasperowicz contributed to this article.