RESEARCH: Economics and Trade REPORTS

April 2019 Trade Bulletin
Highlights of This Month’s Edition • Bilateral trade: In January 2019, U.S. exports of goods to China fell 27.5 percent year-on-year to $7.1 billion—a record-setting decline; the monthly U.S. trade deficit in goods with China totaled $34.5 billion. • Bilateral policy issues: On March 6, Huawei sued the U.S. government, alleging it had been unlawfully and incorrectly banned from U.S. government procurement. • Policy trends in China’s economy: The Chinese government set an annual GDP growth target of between 6 and 6.5 percent in 2019 amid slowing global economic growth projections and ongoing trade tensions with the United States; China’s new Foreign Investment Law aims to address U.S. concerns about intellectual property theft and forced technology transfers; observers expressed concern the law will serve as window dressing and not result in meaningful change. • In focus – China-EU relations: Intra-EU divisions on display amid President Xi’s trip to Europe; the European Commission labeled China a “systemic rival” and France tried to apply greater pressure on Chinese trade and technology policies, while Italy endorsed China’s Belt and Road Initiative.
04/05/2019
March 2019 Trade Bulletin
Highlights of This Month’s Edition • Bilateral trade: In 2018, the U.S. goods trade deficit with China grew 11.6 percent year-on-year to $419 billion due to a 7.4 percent drop in exports to China, while U.S. imports from China grew 6.7 percent to reach a record $539.5 billion. • Bilateral policy issues: U.S.-China trade negotiations continue as the March 1 deadline for tariff increases is delayed until further notice; Huawei’s troubles compound as the U.S. Department of Justice charges the company with violating U.S.-Iran sanctions and stealing trade secrets; countries around the world weigh Huawei’s 5G participation, some push back on U.S. warning of security concerns. • Policy trends in China’s economy: The long-awaited Greater Bay Area Plan, an ambitious blueprint to integrate nine cities in Guangdong Province with Hong Kong and Macau, sets the goal of rivalling Silicon Valley against high barriers to coordination. • Sector focus – Digital Services: With over 800 million internet users, the Chinese digital services market is growing quickly, creating lucrative opportunities for digital services providers in industries such as cloud computing, digital content, and e-commerce. However, U.S. and other foreign digital services companies face significant regulatory obstacles and strong domestic competition.
03/06/2019
China’s Biotechnology Development: The Role of U.S. and Other Foreign Engagement
The U.S.-China Economic and Security Review Commission released a report entitled China’s Biotechnology Development: The Role of U.S. and Other Foreign Engagement, prepared for the Commission by Gryphon Scientific and Rhodium Group. The report examines the development of China’s biotechnology industry and the role foreign trade, investment, and other linkages—particularly with the United States—have played in its evolution.
02/14/2019
February 2019 Trade Bulletin
Highlights of This Month’s Edition  Bilateral Trade: The U.S. trade deficit in goods with China totaled $37.9 billion in November 2018, a 6.9 percent increase over November 2017; in Q3 2018, U.S. services exports to China grew 2.4 percent but the pace of growth for exports and imports has steadily declined since 2016.  Bilateral Policy Issues: In 2018, Chinese FDI to the United States reached $4.8 billion, 83.4 percent drop year-on-year, while Chinese venture capital investments in the United States reached record levels.  Quarterly Review of China’s Economy: China’s economy grew 6.6 percent year-on-year in 2018—the weakest annual pace since 1990—as the effects of China’s deleveraging campaign and trade tensions with the United States start to take a toll; state-owned enterprises enjoyed strong profits in 2018 despite a general economic slowdown, benefiting from the private sector credit crunch and renewed government support; the Chinese Academy of Social Sciences reports China’s declining housing prices slowed toward the end of 2018, though prices in Tier 3 and Tier 4 cities continued to fall.
02/06/2019
Request for Proposals: Report on China's Smart Cities Development
The U.S.-China Economic and Security Review Commission invites submission of proposals to provide a one-time unclassified report on China’s smart cities development. Electronic or hard-copy proposals must be submitted by 5:00PM (EST) on February 20, 2019.
01/23/2019
January 2019 Trade Bulletin
Highlights of This Month’s Edition • Bilateral trade: Due to a lapse in federal funding, the relevant data from the U.S. Bureau of Economic Analysis were not available for a monthly update and analysis. • Policy trends in China’s economy: At the Central Economic Work Conference, Chinese leaders promise increased economic support measures as trade tensions with the United States and flagging domestic consumption weigh on China’s economy; the Chinese government seeks to stabilize growth by cutting the bank’s reserve requirement ratio, increasing infrastructure spending, and expanding local government debt; weak consumer demand heightens attention on surprising official estimates that China’s population could start declining by 2027. • In Focus – “Self-reliance” and Chinese import policy: Some U.S. sales to China of advanced technology products may aid China’s efforts to establish self-sufficiency.
01/11/2019
December 2018 Trade Bulletin
Highlights of This Month’s Edition: • Bilateral trade: In October 2018, the U.S. goods trade deficit increased 22.3 percent year-on-year to reach a record high of $43.1 billion; declines in export categories targeted by retaliatory tariffs contributed to the sharp deficit increase. • Bilateral policy issues: Escalation in U.S. and Chinese tariffs halted for 90 days, but longstanding U.S. concerns about China’s technology transfer, intellectual property (IP) theft, and innovation policies remain unaddressed; the Chinese government commits to take additional steps to combat illicit fentanyl flows, purchase U.S. agricultural products, but details of the agreement remain unclear; the U.S. government took action against Fujian Jinhua Integrated Circuit, citing IP violations, and trade secret theft from Micron (the largest U.S. memory chip maker), and risks to the U.S. military supply chain; Huawei executive arrested for allegedly violating U.S. sanctions. • Policy trends in China’s economy: Alibaba’s Singles’ Day sales reach another record high, but the pace of growth has slowed, reflecting a weaker Chinese economy and rising competition from other e-commerce platforms and promotional events. • In Focus – Lithium-ion batteries: China has positioned itself to dominate global supply chains and production of lithium-ion batteries, a core technology enabling the adoption of electric vehicles and transportation.
12/10/2018
China’s Role in Wildlife Trafficking and the Chinese Government’s Response
China is the largest market for trafficked wildlife products. Its demand has been an important factor leading to declines in iconic species such as elephants and big cats, as well as in lesser-known species like pangolins. Although China’s legal regime establishes protections for many endangered species, loopholes regarding captive breeding and antitrafficking enforcement create opportunities for the illicit wildlife trade to flourish. Success in combating this trade varies by species: regarding the trade in elephant ivory, for example, a confluence of domestic and international pressure culminated in a U.S.-China joint ivory ban, completed in early 2018. Though indications following the ban appear promising, China’s recent partial reversal of its ban on the use of rhino horn and tiger bone highlights continuing shortcomings in its effort to combat wildlife trafficking.
12/06/2018
Fentanyl Flows from China: An Update since 2017
This issue brief provides an update to the Commission's February 2017 report on fentanyl flows from China, examining the progress of negotiations between U.S. and Chinese law enforcement authorities. Although the Chinese government has taken steps to reduce the manufacture and export of fentanyl-like substances, China remains the largest source of illicit fentanyl and fentanyl-like substances in the United States. To combat these flows, U.S. authorities have begun taking legal actions against known Chinese drug traffickers, including announcing the first ever indictments and sanctions against Chinese fentanyl traffickers.
11/26/2018
November 2018 Trade Bulletin
Highlights of This Month’s Edition • Bilateral trade: In Q3 2018, the U.S. goods trade deficit with China grew 12 percent to $115.6 billion on importers rushing orders as tariffs begin to bite; U.S. services exports to China reach a record $20.5 billion. • Bilateral policy issues: The U.S. Department of the Treasury declined to name China a currency manipulator in its October 2018 currency report, but kept China on a monitoring list, citing its significant trade surplus with the United States. • Quarterly review of China’s economy: China’s GDP grew 6.5 percent in Q3 2018, its slowest pace since 2009; the Chinese government is implementing stimulus measures to support short-term economic growth; Chinese households’ falling consumption and rising debt levels prompt worries about China’s rebalancing; local governments resurrect share-buying program to placate jittery stock market investors; state-run media ordered to cloak signs of falling consumer confidence; President Xi conjures images of Deng Xiaoping’s Southern Tour, stresses the need for “self-reliance” in manufacturing and technology.
11/02/2018

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