Issue of China’s Developing country status – UPSC Prelims

World Bank criteria for categorising countries based on income:
  • The World Bank assigns the world’s economies to four income groups: low, lower-middle, upper-middle, and high-income countries.
  • The classifications are updated each year on July 1 and are based on GNI (Gross National Income) per capita (in current $) of the previous year.
Per Capita Income (PCI)
Examples (PCI)
High income
$12,696 or more
USA ($63,413)
Upper Middle  income
$12,695 to $4,096
China ($10,435)
Low Middle income
$4095 to $1046
India ($1928)
Low income
$1045 or less
Significance of this classification:
  • A member describing itself as a developing country can make use of the advantageous provisions available to such countries.
  • All WTO agreements contain special provisions for developing countries, including longer periods to implement agreements and commitments, handle disputes and implement technical standards.
  • Owing to the lack of proper definitions, WTO members themselves declare whether they are “developed” or “developing” countries. (Members can challenge each other’s declared status)
China’s issue:
  • China has declared itself as a developing country.
  • It is being opposed by India, Brazil, Indonesia and the European Union.
How has China responded?
  • The concept of developing countries is relative to developed countries, and international organisations do not have a unified definition of developing countries.
  • Though its economic and social development has made great progress after decades of reforms, the problem of unbalanced and inadequate development remains.
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