China’s rise has precipitated a crisis within the multilateral trading system.W hile frequently attributed to China’s model of state-sponsored capitalism, this chapter shows why that framing of the problem is misleading.T he primary complaints that the US and others have about China’s trade policy are not, in fact, unique to China, but common features of the developmental state.I nstead, I argue, the more fundamental challenge to the trade regime arises from the China paradox – the fact that China is both a major economic heavyweight and a developing country.C onflict over how China should be classified and treated under global trade rules has paralyzed global trade governance and led to a breakdown in rule-making.I n addition, China’s rise has sharply constrained the US’s “institutional power” – its power over the institutions and rules governing trade – leading to an erosion of American support for the multilateral trading system it once created and led.