Chinese ‘Mercantilist’ Policies Among World's Worst for Undermining Trade, ITIF Warns

China’s 2018 “digital protectionism and mercantilist” policies ranked among the worst for the sixth straight year, “undermining trade and competition in key tech sectors,” warned an Information Technology and Innovation Foundation annual report Monday. “While these forms of protectionism typically rely on behind-the-border regulations rather than tariffs to protect local firms, the objective and impact remain the same -- either to replace foreign goods and services with local ones, or to unfairly promote exports, or both.” Among China’s worst 2018 infractions was a new “standardization law” that shuns international principles and best practices and “could be used to favor local tech firms,” ITIF said. New rules could “potentially force firms to store data only in China if it is related to privately funded, commercially focused research,” it said. China’s refusal to reference its World Trade Organization commitments in the standardization law “raised further concerns about potential discriminatory intentions,” said ITIF. “Unique levels of standards,” combined with lack of transparency about implementation and enforcement “adds further uncertainty for foreign firms” there, it said. “Such nontransparent and discriminatory standards can act as a significant barrier to trade, especially for high-tech.”