July-25-2008
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2006 REPORT TO CONGRESS OF THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION
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DEDICATION OF THIS REPORT TO COMMISSIONER GEORGE BECKER
TRANSMITTAL LETTER TO THE CONGRESS
iii
COMMISSIONERS APPROVING THE REPORT
vii
TABLE OF CONTENTS
EXECUTIVE SUMMARY
1
KEY RECOMMENDATIONS TO CONGRESS
14
INTRODUCTION
19
Chapter 1: U.S.-China Trade and Economic Relationship
25
Overview
1.
The Status of China’s Compliance with its World Trade Organization Obligations and the Impact of China’s Industrial Subsidies on U.S. and Other Markets
27
2.
China’s Approach to Intellectual Property Rights and its Production of Counterfeit Goods
32
3.
China’s Financial System and Monetary Policies and their Effects on the United States
45
Recommendations to Congress
55
Chapter 2: China’s Global and Regional Activities and Other Geostrategic Developments
65
China’s Regional Activities
China’s Proliferation and Involvement in North Korea’s and Iran’s Nuclearization Activities
82
China’s Energy Needs and Strategies
95
108
Chapter 3: China’s Military Power and its Effects on American Interestsand Regional Security
127
China’s Military Modernization
The Effect of U.S. and Multilateral Export Controls on China’s Military Modernization
139
The Military Balance Across the Taiwan Strait
145
153
Chapter 4: A Case Study of the Automotive Industry that Illustrates Challenges to U.S. Manufacturing and the U.S. Defense Industrial Base
167
179
Chapter 5: China’s Internal Problems, Beijing’s Response, and Implications for the United States
183
193
Chapter 6: China’s Media and Information Controls
199
202
Comprehensive List of the Commission’s Recommendations
205
Commission’s Recommendations
Additional Views of Commissioners
212
Appendices:
Appendix I: U.S.-China Economic and Security Review Commission Charter
219
Appendix II: Background on Commissioners
227
Appendix III: Public Hearings of the Commission
239
Appendix IV: List of Witnesses Who Testified at Commission Public Hearings
243
Appendix V: List of Research Material
249
Appendix VI: Abbreviations
251
Appendix VII: Excerpts from U.S. Department of State Report Adherence to and Compliance with Arms Control, Nonproliferation, and Disarmament Agreements and Commitments
255
Commission Staff and Acknowledgements
265