Highlights of This Month’s Edition
• Bilateral trade: U.S. goods deficit with China reached $87 billion in Q2 2019, down 8 percent year-on-year; U.S. Q1 2019 services trade surplus with China fell for the first time since 2006.
• Bilateral policy issues: President Trump announced new tariffs on Chinese goods effective September 1, citing China’s failure to make large purchases of U.S. agricultural goods and curb the flow of fentanyl to the United States; the WTO issued a mixed ruling on China’s challenge of U.S. calculation of tariffs on certain Chinese goods; the Trump Administration issued a memorandum calling out WTO standards on developing country status for China and others.
• Quarterly review of China’s economy: China’s gross domestic product (GDP) grew 6.2 percent in Q2 2019 as stimulus deployed earlier in the year wore off; escalating trade tensions also hurt industrial profits as export growth collapsed, prompting fears about employment stability.
• Policy trends in China: In an approach different from the recent takeover of Baoshang Bank, China’s financial regulators assisted the struggling Bank of Jinzhou by facilitating investment from three state-run investment firms; trading began on China’s new technology trading platform, but performance has been uneven.
The hearing will assess China’s role in global health, pharmaceuticals, and medical products. In addition, it will examine the activities of Chinese health and biotech firms in the United States, and U.S. access to China’s health market. Finally, the hearing will consider the implications for U.S. public health and national security of growing U.S. dependence on Chinese health products.
Over the past two decades, the Chinese People’s Liberation Army (PLA) has expanded its involvement in humanitarian assistance and disaster relief (HA/DR) missions outside China’s borders. Through its contributions to HA/DR, Beijing has provided important assistance to disaster-stricken populations and sought to burnish its image as a “responsible stakeholder” in the international system. At the same time, Beijing routinely allows political considerations to guide its participation in HA/DR missions, violating the humanitarian spirit of these operations and suggesting Chinese leaders may view HA/DR less as a global good than an instrument of influence. Moreover, the PLA has cooperated haltingly with international partners during these missions and at times willfully disregarded best practices for military participation in HA/DR. This report examines the drivers behind the PLA’s increasing participation in HA/DR abroad; the impact, both positive and problematic, of the PLA’s involvement in several recent multinational disaster relief operations; and the implications of the PLA’s involvement in and approach to these missions for the United States.
Highlights of This Month’s Edition
• Bilateral trade: U.S. goods deficit with China totaled $30.2 billion in May 2019, down 9 percent year-on-year, reflecting a decline in both exports and imports.
• Bilateral policy issues: New tariffs on Chinese goods halted as the United States and China agree to resume trade talks; the United States adds five entities tied to China’s development of supercomputers to the Entity List; U.S. importers are attempting to sidestep tariffs on goods from China, but some are reconsidering production in China altogether as a possible fourth wave of tariffs looms; China suspends WTO dispute against the EU over China’s market economy status after it allegedly lost the case, allowing the EU and United States to continue treating China as a nonmarket economy.
• In focus – The Baoshang Takeover: In a surprise move, Chinese financial regulators took over Baoshang Bank on May 24, sparking a slowdown in interbank lending to small and regional banks, even as the People’s Bank of China intervened to keep interbank credit channels open.
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.
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.