In his report to the 19th Congress of the Chinese Communist Party, General Secretary Xi Jinping declared that China would complete the modernization of its armed forces by 2035 and transform them into “world-class forces” by the middle of the 21st century. Xi’s vision for the composition and mix of capabilities that would allow the People’s Liberation Army to be judged to be a “world-class” military is unknown. Will it be a force with global expeditionary capability, mimicking the United States, or an overwhelming regional force reminiscent of Imperial Japan in 1941? Or, as the two are not necessarily mutually exclusive, could it be both? This hearing will explore what the implications of a world-class Chinese military might be for the United States and its allies and partners, with the goal to begin a public dialogue on this topic and develop recommendations for Congress on how the United States might best protect its interests in the face of a highly-capable Chinese competitor.
This hearing will examine China’s development of artificial intelligence, new materials, and energy storage, renewable energy, and nuclear power. It will assess China’s capabilities in producing and commercializing these technologies vis-à-vis the United States and its ambitions to export these technologies and shape their global governance in ways that disadvantage the United States. The hearing will also consider China’s potential military application of these technologies and strategic implications for the United States.
Highlights of This Month’s Edition
• Bilateral trade: In April 2019, U.S. goods exports to China fall, while imports are up, pushing the U.S. goods deficit to $26.9 billion, from $20.7 billion in March.
• Bilateral policy issues: An impasse in trade negotiations in early May preceded a volley of policy actions from the United States, including a tariff hike and an additional proposed list of tariffs affecting the remainder of U.S. imports from China. China responded to U.S. actions by threatening rare earths export blockades, stringent cybersecurity reviews, and regulatory retaliation.
• In focus – Chinese financial markets: Beijing’s efforts to liberalize financial markets remain stalled, but there have been signs of progress over the last year, increasing foreign access to China’s financial sector.
In 2018, China reported several cases of African swine fever, or ASF, a highly contagious disease that is deadly to pigs. The disease has now spread throughout China, where it has already reduced the country’s hog population by more than 50 million, and throughout other countries in Asia. This report provides an overview of the ASF outbreak in China, the implications for U.S. exports of pork and animal feed products, and the risks posed to U.S. food safety and food security.
Highlights of This Month’s Edition
• Bilateral trade: U.S. goods deficit with China declined in Q1 2019 to $80 billion, down 12.2 percent year-on-year; in 2018, U.S. services surplus in China grew less than 1 percent, as exports increased 2.2 percent and imports increased 5.5 percent.
• Bilateral policy issues: The United States won a WTO dispute against China for unfairly administering its tariff-rate quotas for wheat, corn, and rice; the EU is reported to have won a dispute brought by China over continuing to treat China as a nonmarket economy for the purposes of applying antidumping duties.
• Policy trends in China’s economy: Beijing attempted to recast the Belt and Road Initiative’s image in its second forum, following international pushback on debt-trap diplomacy and corruption; regulators released new rules for the highly anticipated high-tech board on the Shanghai Stock Exchange.
• Quarterly review of China’s economy: China recorded GDP growth of 6.4 percent in the first quarter of 2019 as key economic indicators rebounded from the end of 2018; policymakers leaned heavily on fiscal measures to shore up growth in place of monetary easing, creating concerns about the sustainability of local government debt growth and an expanding budget deficit.
In April 2019, the Hong Kong government formally proposed an extradition bill that would—if passed into law—increase the territory’s susceptibility to Beijing’s political coercion and further erode Hong Kong’s autonomy. The bill, which followed a minimal public comment period and could face a final vote before July 2019, would amend Hong Kong’s laws to allow ad hoc extraditions to mainland China and over 100 countries and territories without mutual extradition arrangements with Hong Kong. In addition to further intruding into Hong Kong’s affairs, the proposed bill could create serious risks for U.S. national security and economic interests in Hong Kong, and potentially violate several key provisions of the U.S.-Hong Kong Policy Act of 1992, which outlines U.S. policy toward the territory. This issue brief provides background on the bill and observers’ concerns with the proposal, risks posed to U.S. interests in Hong Kong, and considerations for Congress.
The U.S.-China Economic and Security Review Commission was created by the United States Congress in October 2000 with the legislative mandate to monitor, investigate, and submit to Congress an annual report on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China, and to provide recommendations, where appropriate, to Congress for legislative and administrative action.