China faces a particular challenge in reconciling the WTO obligations on the protection of intellectual property rights (IPRs) with its goal of improving access to cutting-edge technologies for its national firms. Here it is relevant that China‘s dominance will be associated at least initially not with technological leadership – as in the case of its predecessors Britain and the US – but with technological catch-up. So in the implementation of IPRs, it may favor technogical dissemination over creating incentives for innovation to an extent that creates tensions vis a vis its TRIPS obligations. For instance, the U.S. ITC (2011) estimated, based on a survey of more than five thousand U.S. IP-intensive firms, that the losses to U.S. industry from IPR infringement in China totaled roughly $48 billion in 2009 and that U.S. companies spent nearly $5 billion that year to combat this infringement. These estimates raise the question of whether China is flouting the rules in the WTO‘s TRIPs agreement that require countries not only to embody in their laws adequate levels of IP protection, but to implement the laws ―effectively and expeditiously.‖ Consider China‘s exchange rate policy. In the case of China, its accession to the WTO is widely acknowledged to have led to considerable liberalization and hence to circumscribing China‘s ability to use trade policies for mercantilist purposes. Recall that China‘s export-focused development strategy began in the mid-1980s but it did not start generating consistently large current account surpluses until the oughties. It is not a coincidence therefore that China‘s mercantilism started to emerge after China‘s accession to the WTO. With constraints on the use trade policy instruments (including export subsidies) to sustain the export juggernaut, China turned to use policy instruments other than trade, namely the exchange rate (Rodrik, 2009). But undervalued exchange rates not only sustained exports, it also generated surpluses.

China made far-reaching promises to rapidly – perhaps too rapidly - liberalize services as part of its accession to the WTO. These commitments encompassed whole swathes of the economy which had previously been closed to foreign participation, ranging from transport and telecommunication to finance and retail. In banking, for example, foreign banks had been virtually shut out at the time of accession, but China committed to eliminate all restrictions over the next seven years. The problem is that the measures affecting entry into services markets, such as licensing requirements and procedures, allow for significant regulatory discretion. Recently the US complained about Chinese measures affecting trading rights and distribution services for certain publications and audiovisual entertainment products, and the WTO panel found that these measures were indeed inconsistent with China‘s WTO obligations. In other cases, it can be harder to disentangle the protectionist from the legitimate. For example, when China decided to impose minimum working capital requirements for each direct branch of a foreign bank located in China rather than applying (as, for example, the Europeans had requested) minimum capital requirements and capital adequacy ratios to the overall commercial presence of a bank in China, it was hard to tell whether the goal was to ensure financial stability or to inhibit foreign competition. The broader concern is that the WTO‘s services rules are not sufficiently sophisticated to prevent de facto back-sliding on de jure ambitious commitments.

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