This research examines these issues with normative and empirical methods to discern the trend and rationale behind the new generation of subsidy rules. It argues that certain rules in the EU and US FTAs serve as good models for future subsidy regulations. These rules are deemed more strict, specific, and comprehensive, serving additional functions beyond ensuring fair trade alone, such as leveling the playing field and addressing the overcapacity of products. The research clarifies that the rationale of the new rules should be to strike a balance between individual government’s power to develop the economy and the need to ensure fair competition among countries, which is crucial for sustainable development and global peace. This research also explores potential cooperation between Eastern and Western countries in developing new international subsidy rules by analyzing China’s position and recent practices.