China's new WTO document: multilateral illusion to conceal capital controls, statism, and predatory mercantilism

On February 17, China submitted a position paper to the World Trade Organization (WTO) outlining its stance on WTO reform “under the current circumstances.” However, analysis of this policy document, officially released on February 18, 2026, requires careful consideration of Beijing's real intentions. In the text, Chinese diplomacy stands as the defender of an open, inclusive, and non-discriminatory multilateral trading system. However, comparing these statements with the extensive evidence documented in the essay Xi Jinping's China and the report Europe Under Attack 2025, a clear contradiction emerges between the institutional rhetoric and the regime's actual operational practices.

GettyImages

In particular, the essay dismantles the Asian narrative by clarifying how the Chinese Communist Party's strategy does not aim to integrate into the liberal order, but rather to rewrite the rules of trade and international law by governing global institutions from within. The essay devotes careful analysis to this aspect, highlighting and documenting how Beijing considers global governance a strategic objective to be achieved through constant diplomatic action, aimed at placing its officials in top positions in international agencies in order to align them with its authoritarian principles. This deliberate effort seeks to strip multilateral organizations of their founding values, bending them to the regime's transformative and hegemonic ambitions.

This plan finds its most aggressive expression in the predatory behavior described in the report Europe Under Attack 2025. China's economic expansion is framed within the doctrine of Liminal Warfare, a multidimensional and asymmetrical war waged constantly below the threshold of conventional armed conflict. In this context, trade dynamics are not aimed at free trade, but at co-optation and coercion, transforming the monopoly of supply chains and infrastructure into a geopolitical weapon.

This rigid state-controlled framework is complemented by the complex and opaque functioning of trade in mainland China. A fundamental aspect, often overlooked in institutional analyses, is the existence of strict and asymmetrical capital controls. The Chinese economy, which has long been deeply closed, allows financial resources, including foreign ones, to enter very easily to fuel the national industrial apparatus, but puts up insurmountable barriers when it comes to their exit. To circumvent this structural rigidity and maintain a magnet for global investment, the government exploits territories such as Hong Kong, Macao, and, to some extent, Shanghai, designating them as special commercial regions. Although financial constraints remain tight in most of the mainland, the government elite and big business leaders know how to circumvent them by setting up holding companies in Hong Kong that serve as a strategic bridge for the flow of capital outwards.

Faced with this complex corporate engineering, a logical and crucial question arises: who facilitates the actual physical and traceable movement of cash and, above all, who exercises ultimate control over these huge amounts of liquidity once they enter these special jurisdictions? The answer lies in the intrinsic nature of the Chinese political and economic system, in which no company can truly be considered private. Every large company operating in China requires formal government approval, often involves direct state ownership, and is required by law to establish and host Chinese Communist Party operating committees within its own structure. This architecture ensures that the state maintains absolute control over decision-making, subordinating any commercial interests to the Party's security and expansion objectives and effectively eliminating any margin of trust for international investors.

Today, the main reasons that still drive Western companies to invest in the Chinese market stem almost exclusively from the inertial forces of globalization. Nevertheless, China has lost much of its appeal as a place to do business. Due to a repressive regulatory framework and increasingly fragile and openly conflictual diplomatic relations, a growing number of democratic nations now consider Beijing a hostile jurisdiction with extremely high operational and legal risks. In light of these facts, the reform document presented to the WTO appears not as a genuine effort to cooperate globally, but as a calculated attempt to institutionalize its predatory practices, neutralizing the defense mechanisms of liberal democracies in order to impose an authoritarian economic order.