US House of Representatives Passes Bill to Strip China of 'Developing Country' Status

Strategic Insights -

As the world grapples with the evolving economic and geopolitical landscape, the US House of Representatives has passed a bill aimed at revising China's classification as a "developing country" in international organizations. The move, seen as part of a broader rivalry between the US and China, has sparked debate about the accuracy and relevance of the term "developing country." While the US government maintains that China's economic status warrants a change in classification, international organizations such as the United Nations and the World Bank continue to use the term "developing country" for monitoring purposes.

Key Takeaways:

  • The US House of Representatives passed a bill titled "PRC Is Not a Developing Country Act" with an overwhelming 415-0 vote, directing the Secretary of State to strip China of its "developing country" status in international organizations.
  • China is not a formal member of the Group of 77 (G77), a coalition of 137 "developing countries," but is closely allied with the group, which has a long history dating back to 1964.
  • The G77 uses the term "developing countries" to refer to nations that are identified as "least developed countries," "landlocked developing countries," and "small island developing states."
  • The World Bank Data Blog notes that the IMF classifies 37 countries as "Advanced Economies" and all others as "Emerging Market and Developing Economies," with no strict criteria for classification.
  • The United Nations has no formal definition of developing countries, but uses the term for monitoring purposes and classifies 159 countries as developing.
  • The US legislation requires the Secretary of State to submit a report to Congress identifying all current treaty negotiations in which the US and China are both members, with the goal of changing China's status from developing to upper middle-income, high-income, or developed country.

Statistics:

  • China accounts for 18.6% of the global economy, making it the world's second-largest economy.
  • The World Bank declared in 2015 that the "developing/developed world categorization" had become less relevant and would phase out its use.
  • There are 159 countries classified as developing by the United Nations.
  • The Group of 77 has 137 member countries.
  • The World Bank classifies the world's economies into four groups based on gross national income per capita: high, upper-middle, lower-middle, and low-income countries.

Sources:

  • United Nations: No specific date mentioned
  • US House of Representatives: March 27, 2023 (PRC Is Not a Developing Country Act)
  • Anwarul K. Chowdhury, Ambassador of Bangladesh to the UN: No specific date mentioned
  • Jeffrey Sachs, Economist: No specific date mentioned
  • Tariq Khokhar and Umar Serajuddin, World Bank Data Blog: No specific date mentioned
  • World Bank: 2015 (declaration on the phasing out of the "developing/developed world categorization")
  • World Trade Organisation (WTO): No specific date mentioned