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India questions China’s claim of being a developing nation; all you need to know

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The World Bank defines an upper middle-income country as one which has a per capita income of $4,096 to $12,695. China’s per capita income in 2020 stood at $10,435.

India questions China’s claim of being a developing nation; all you need to know

India has questioned China’s claim that it is a developing country in the latest round of its trade policy review at the World Trade Organisation (WTO).

India claims that China’s per capita income belongs to upper middle income country as per the definition of the World Bank, Business Standard reported.

The World Bank definition

The World Bank defines an upper middle-income country as one which has a per capita income of $4,096 to $12,695. Those with per capita income of $12,696 and above are considered high income countries. According to the Business Standard report, China’s per capita income in 2020 stood at $10,435. United States with $63,413 per capita income is considered a high income nation, while India, with a per capita income of $1928, is in the group of low middle income nations.

What are the advantages of “developing country” status?

According to the World Trade Organisation website, countries with the developing country status enjoy certain rights such as longer transition periods for implementing agreements and technical assistance.

On account of the rapid economic progress, the US has been demanding that India and China voluntarily give up the benefits offered to developing countries at the WTO. However, both the countries have opposed the move.

China’s reply

China has highlighted the lack of a proper definition by international organisations and said the concept of a developing country was relative to developed nations.

At present, members of the WTO themselves assign the “developed” or “developing” country status. Others can challenge a country’s declared status. The country declaring itself as a “developing” nation can take advantage of the provisions available to such countries.

In December, China's ambassador to the WTO Li Chenggang told Reuters in an interview that Beijing was willing to forego many of the benefits even though it would retain its "developing" country status at the global trade body.

On account of lingering poverty, China still considers itself a developing country despite the strong growth, Li Chenggang had said. However, he declined to say when the country would completely cease to consider itself a developing country.

Others have raised alarm too

India is not the only one to question China’s developing country status. The US has also criticised its developing country status and said it was unfair of Beijing to avail preferential treatment intended for poorer countries.

Brazil, Indonesia and the European Union too raised an alarm over the issue.

India had sought an explanation of China’s claim that it has shifted “from a stage of high-speed growth to a stage of high-quality development”. In reply, China said ‘high-quality development’ will include a new development concept with innovation as the first driving force.

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