Research Archive

Highlights of This Month’s Edition • Bilateral trade: In January 2018, the U.S. goods deficit with China grew 14.8 percent year-on-year to reach $36 billion—its highest ever for January and its highest monthly level since September 2015. • Bilateral policy issues: The U.S. Department of Commerce submits its Section 232 recommendations for tariffs or quotas on U.S. steel and aluminum imports; SEC blocks acquisition of Chicago Stock Exchange by Chinese-led investor group based on concerns over transparency, oversight, and compliance with ownership limits; AmCham and USCBC surveys of U.S. businesses in China find some signs of rising optimism due to increasing profits and confidence in China’s economic growth, but regulatory and market access challenges persist as firms feel increasingly unwelcome in Chinese markets. • Policy trends in China’s economy: In their continuing battle against financial risks, Chinese regulators maintain focus on shadow banking, issuing a series of measures to curb riskier forms of lending. • Sector focus – Sorghum and Soybeans: In response to defensive U.S. trade measures, China considers duties against U.S. sorghum and soybeans, putting 67 percent of U.S. agricultural exports to China at risk. 03/09/2018
Highlights of This Month’s Edition • Bilateral trade: In 2017, the U.S. goods trade deficit with China climbed 8.1 percent on the previous year to $375.2 billion, the highest deficit on record; U.S. services exports to China grow at the slowest rate since 2009 due to a slowdown in tourism to the United States. • Bilateral policy issues: The Office of the U.S. Trade Representative’s 2017 report on China’s adherence to WTO commitments criticizes China’s noncompliance, noting “it is now clear that the WTO rules are not sufficient to constrain China’s market-distorting behavior.” • Quarterly review of China’s economy: China’s economy grew 6.9 percent year-on-year in 2017, driven by greater domestic consumption, higher industrial output, and global demand. • Policy trends in China’s economy: The Chinese government takes steps to discourage bitcoin mining in its latest crackdown on the cryptocurrency; China’s central bank adjusts exchange rate management regime. • Sector focus – Chinese Outbound Investment: Chinese investment into the United States drops 35 percent following China’s imposition of capital control measures; newly announced Chinese investment deals in the United States are 90 percent lower in 2017 than 2016; concerns over espionage activity, opaque ownership structures, and a lack of privacy protections for U.S. customers cause HNA and Ant Financial’s U.S. acquisition transactions to flounder and terminate Huawei’s mobile phone partnerships with U.S. carriers. 02/07/2018
Highlights of This Month’s Edition • Bilateral trade: The U.S. trade deficit in goods with China totaled $35.4 billion in November 2017, its highest monthly level in the past two years and a 16.2 percent increase year-on-year. • Bilateral policy issues: President Trump issues National Security Strategy calling for more assertive policies to combat Chinese influence campaigns and economic coercion; the U.S. government is pursuing multilateral and bilateral approaches to confront China’s market-distorting support for sectors such as steel and aluminum. • Policy trends in China’s economy: At the Central Economic Work Conference, Chinese leaders maintain last year’s focus on financial risks and supply-side structural reform but place less emphasis on deleveraging; IMF cites China’s credit growth, regulation, and implicit credit guarantees from banks and government actors as top concerns in its most recent financial system stability report. • Sector focus – Consumer Goods: U.S. consumer goods exports to China experience consistent growth from 2003 to 2016 despite accounting for a small portion of U.S. exports to China; on December 1, the Chinese government cut tariffs on several products, including top U.S. consumer good exports. 01/08/2018
The U.S.-China Economic and Security Review Commission invites submission of proposals to provide copyediting and proofreading services to the Commission. Electronic or hard copy proposals must be received by 5:30PM EST on January 22, 2018. 12/18/2017
Highlights of This Month’s Edition • Bilateral trade: In October 2017, U.S. goods trade deficit grew 13.2 percent year-on-year to reach $35.2 billion; year-to-date, the deficit reached $309 billion, up 7 percent year-on-year. • Bilateral policy issues: President Trump traveled to China for a presidential summit with President Xi, which culminated in a series of business agreements worth about $250 billion, but no resolutions on higher-priority issues; citing wide-spread shortcomings in China’s economic reform, the U.S. Department of Commerce maintains its classification of China as a nonmarket economy, prompting China to launch a new WTO case against the United States. • Policy trends in China’s economy: China announces plans to relax or eliminate caps on foreign ownership in Chinese financial institutions; NDRC launches third wave of mixed-ownership SOE reforms, seeking to introduce increased private capital in the state sector while simultaneously strengthening government’s role in the economy; Alibaba’s Singles’ Day reaches new sales record of $25.3 billion, eclipsing U.S. Black Friday and Cyber Monday sales. • Sector focus – Commercial Aviation: U.S. and Chinese aviation regulations will recognize each other’s approvals for aircraft and aviation products, likely increasing U.S. imports of Chinese aircraft and aviation. 12/05/2017
The U.S.-China Economic and Security Review Commission submission of proposals to provide a one-time unclassified report on the U.S. role in China’s biotechnology development. Electronic or hard copy proposals must be received by 5:30PM EST on January 10, 2018. 11/29/2017
The U.S.-China Economic and Security Review Commission invites submission of proposals to provide a one-time unclassified report on China’s Internet of Things. Electronic or hard copy proposals must be received by 5:30PM EST on January 5, 2018. 11/27/2017
Highlights of This Month’s Edition • Bilateral trade: In the third quarter of 2017, the U.S. goods trade deficit with China grew 6.7 percent due to increased imports; U.S. services exports to China reach a new record, driven by increases in tourism, financial services, and intellectual property payments. • Bilateral policy issues: In a setback to China’s pursuit of market economy status, the EU adopts a new antidumping methodology and the United States implements new duties on imports of Chinese aluminum; U.S. experts and industry groups highlight several intellectual property and technology transfer challenges in China as part of the Administration’s Section 301 investigation. • Policy trends in China’s economy: China delays a food safety certification program that would put $22 billion of U.S. exports at risk by two years; after lobbying by the EU, China ends a discriminatory ban on soft cheese imports; China’s government announces changes to China’s drug approval process that—if fully implemented—may reduce approval delays for U.S. drugs by several years. • Quarterly review of China’s economy: Chinese government ensures high rate of growth for China’s economy in the run-up to the 19th Party Congress, but problems remain unaddressed. • Sector focus – Electric Vehicles: China transforms into the global electric vehicle leader by leveraging state support and excluding foreign competitors. 11/03/2017
Highlights of This Month’s Edition • Bilateral trade: In August 2017, U.S. goods trade deficit increased 3.1 percent year-on-year to reach $34.9 billion; U.S. exports to China were nearly $11 billion, up 16.3 percent year-on-year. • Bilateral policy issues: President Trump blocks an attempted acquisition of Lattice Semiconductor by a company with links to the Chinese government amid potential national security concerns. • Policy trends in China’s economy: Chinese regulators are putting the brakes on bitcoin and other virtual currencies; U.S. coal and liquefied natural gas exports to China surge due to favorable pricing and growing demand. • Sector focus – Waste and Scrap: China begins closing its waste and scrap market, putting $5 billion of U.S. exports at risk. 10/05/2017
As space becomes more “congested, contested, and competitive,” as termed in the 2011 U.S. National Security Space Strategy, efforts by spacefaring nations to establish norms of behavior in space have become increasingly important. This issue brief examines China’s views on the Code of Conduct for Outer Space Activities proposed by the European Union, finding that Beijing instead continues to support a binding treaty that would ban the deployment of weapons in space, which it has jointly proposed with Russia. This treaty would significantly limit U.S. activities in space while doing little to reduce actual threats to space assets. China’s actions in regards to codes of conduct in other areas indicate it sometimes uses negotiations to prolong the status quo, and does not always adhere to its agreements. Should China continue to place a high value on developing military counterspace capabilities, its position should be expected to remain unchanged. 09/11/2017

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Disclaimer

The research papers in this section were prepared at the request of the Commission to support its deliberations. They are posted to the Commission’s website in order to promote greater public understanding of the issues addressed by the Commission in its ongoing assessment of U.S.-China economic relations and their implications for U.S. security, as mandated by P.L. 106-398 and P.L. 108-7. Their posting to the Commission’s website does not imply an endorsement by the Commission or any individual Commissioner of the views or conclusions expressed in them.