Today is the Commission's second hearing on U.S.-China trade and investment issues.

The Commission was created by Congress to examine our growing economic relationship with China and the implications of this relationship on U.S. national security interests. Perhaps no htmect of the U.S.-China economic relationship is as significant to this examination as the implications of China's impending accession to the World Trade Organization (WTO). Many believe China's WTO accession will reap significant economic benefits for the United States in terms of greater access to the Chinese market for U.S. goods and services, and that it will bring about positive political and economic reform within China. Others believe that the potential benefits to the U.S. economy of China's WTO accession are overstated (some in fact believe it will increase our trade deficit with China), and that China will be unable or unwilling to live up to its WTO commitments. Today's hearing should help shed light on this important debate.

The implications for the U.S. economy and U.S. national security interests of China's WTO accession will likely vary by economic sector. Today we will hear from labor and industry representatives from a number of the key sectors that will be impacted. The Commission looks forward to the testimony of these witnesses and to their perspectives on current and future trends regarding our trade and investment relationship with China.

Today's hearing will aid the Commission in carrying out its general mandate to examine the economic factors in the U.S.-China relationship that pose challenges to U.S. national security. Additionally, today's proceedings should help the Commission address the specific mandates in its Charter to report to Congress on (1) actions China has taken in the context of the WTO that are adverse or favorable to U.S. interests, (2) differences between China's trade and investment relationship with the U.S. and its other trading partners, (3) the national security implications of the large capital flows between the U.S. and China, and (4) whether the U.S. should consider invoking Article XXI of the GATT, which allows parties to derogate from their GATT obligations when their national security interests are implicated, as a result of any adverse impact on the U.S. arising from its economic relationship with China.

Later this Fall, the Commission plans to hold a third hearing on trade and investment issues to explore some of the key issues ñ such as trade in financial services and protection of intellectual property rights ñ that were not covered in the first two hearings. The Commission will also hold hearings on export controls, Chinese companies' fundraising in the U.S. capital markets, the Chinese budget and, tomorrow, China's strategic perceptions of the U.S. The current schedule is available on the Commission's website.

I would like to turn now to my Co-Chair for this hearing, Commissioner Becker, for an opening statement.