Highlights of this Month’s Edition • Bilateral trade: October U.S. goods trade deficit with China at $33 billion, the smallest deficit in seven months. • Bilateral policy issues: RMB added to the SDR basket; a U.S.-China agreement on joint inspections of accounting firms falls through, placing U.S. regulators in violation of their mandate. • Policy trends in China’s economy: Chinese e-commerce soars as Singles’ Day eclipses Black Friday and Cyber Monday in online sales. • Sector spotlight – Traditional Chinese medicine: Internationalization and modernization key for increasing quality and regulatory acceptance and boosting exports to Western market.
Highlights of this Month’s Edition
• Bilateral trade: In September, the U.S. deficit in goods trade with China hit $36.3 billion, the highest monthly deficit on record; quarterly service imports from China reach highest level on record, weakening the U.S. trade in services surplus.
• Policy trends in China’s economy: Fifth Plenum sets course for the 13th Five-Year Plan; President Xi’s state visit to the UK nets expanded international role for the RMB.
• Quarterly review of China’s economy: China’s GDP grew 6.9 percent in third quarter; government moves to support the economy.
• Sector spotlight – Aluminum: Chinese subsidies and preferential policies have created overcapacity that has lowered global prices and eroded the profitability of the U.S. aluminum sector.
China’s strict regulation of entertainment imports, including foreign films, violates the country’s World Trade Organization (WTO) commitments, as determined in a 2007 WTO decision calling for China to open its film market to foreign films. After years of noncompliance and inaction, China partially opened its film market in 2012 following a deal with the United States. The deal allowed for the import of 34 films each year—up from the previous limit of 20 films—in exchange for a temporary suspension of further U.S. WTO actions against China’s film importation policies. During Chinese President Xi Jinping’s September 2015 visit to the United States, the Motion Picture Association of America and China Film Group reached two new film agreements, which could increase market access for foreign films in China. Based on recent history, however, promises that China will further open its film market should be viewed skeptically.
Chinese box office sales have increased alongside China’s standard of living, resulting in China surpassing Japan as the world’s second largest film market (behind the United States) in 2012. If global film market growth rates remain consistent over the next few years, many experts expect China to surpass the United States as the largest film market in the world as early as 2018. Hollywood relies on China’s film market for revenue, but the process to get films into China is arduous due to strict and opaque regulation of film imports. China’s regulations and processes for approving foreign films reflect the Chinese Communist Party’s position that art, including film, is a method of social control. As a result of these regulations, Hollywood filmmakers are required to cut out any scenes, dialogue, and themes that may be perceived as a slight to the Chinese government. With an eye toward distribution in China, American filmmakers increasingly edit films in anticipation of Chinese censors’ many potential sensitivities.
Highlights of this month's edition:
• Bilateral trade: U.S. goods deficit in August hits $34.9 billion, the highest monthly deficit this year. • Xi Jinping’s state visit to the United States: Presidents Obama and Xi announce cooperation in several areas, including agreement that neither government will support cyber-enabled theft of information for commercial advantage; joint initiatives to combat climate change; and narrowed scope in national security reviews of foreign investments. President Xi announces China will begin a national cap-and-trade program in 2017; pledges over $18 billion in total to development assistance, peacekeeping, climate change, and women’s rights initiatives. • Policy trends in China’s economy: New state-owned enterprise reform plan repeats ongoing reform efforts and lacks clear direction.
Highlights of this month's edition:
•Bilateral trade: U.S. goods deficit in July hits $31.6 billion, the highest monthly deficit this year.
•Policy trends in China’s economy: China devalues the RMB, then intervenes to strengthen it again; persistent volatility in China’s stock market fuels investor uncertainty; commodity prices continue to fall as China’s economy slows.
•Sector spotlight – Steel: In response to declining domestic demand for steel, China’s mills export their surplus rather than limit production and lay off workers; U.S. and foreign competitors cite dumping.
Highlights of this month's edition: Bilateral trade: Weak U.S. exports lead to a $170 billion deficit in the first half of 2015; U.S. maintains surplus in services trade despite slowing exports growth. Bilateral policy issues: WTO members reach deal to expand the Information Technology Agreement. Quarterly review of China’s economy: China maintains 7 percent GDP growth in the second quarter; stock market sell-off prompts government interference, threatens to derail reforms. Sector spotlight – Semiconductors: Chinese government sets sights on semiconductor industry, placing pressure on U.S.-based multinationals.
This issue brief provides information and analysis of the precipitous collapse of China’s stock market, including the impacts of the fall, the measures employed by China’s government to stem the rout, and the history of volatility in the market before the fall.
Highlights of this month's edition: Bilateral trade: Monthly U.S. goods trade deficit with China is up 15 percent from the previous month as imports outpace exports.Bilateral policy issues: Latest S&ED yields few concrete outcomes, no resolution on issues related to cyber security or China’s activities in the South China Sea. Policy trends in China’s economy: Government introduces a slew of reforms to stimulate economy and halt stock market slide; Standing Committee adopts a far-reaching national security law that redefines the government’s “core interests” to include almost every aspect of private and public life, and behavior of foreign corporations and foreign NGOs operating in China. Sector spotlight – E-commerce: Foreign investors granted full ownership of some e-commerce businesses across China amid liberalization in other value-added telecommunications services in Shanghai FTZ.
Highlights of this month's edition: Bilateral trade: Monthly U.S. goods trade deficit with China down 15.2 percent in April on fall in U.S. imports; Bilateral policy issues: The United States indicts six Chinese citizens on charges of trade secret theft; IMF says China’s currency is no longer undervalued; Policy trends in China’s economy: China undercuts fiscal reform by reopening lending to indebted local governments; Chinese stocks volatile as exchanges rebound after dramatic falls; China’s State Council redefines China Development Bank as a “development-oriented financial institution”; Xi Jinping goes to Eurasia, Li Keqiang to Latin America, both sign multibillion dollar bilateral finance deals; Sector spotlight – Sorghum: Following a surge in U.S. sorghum exports to China, Chinese authorities are imposing stricter customs inspections, raising concerns about a possible barrier to trade.
This paper analyzes China’s preferential trade strategy and rationale. It finds that China has signed trade agreements primarily with countries that are neither significant in the global economy nor vital to China’s export sector. Indeed, several partners enjoy bilateral trade surpluses with China, and have comparative advantages in industries that China may want to protect from outside competition. The way in which China negotiates trade deals is also confounding. Unlike the United States, China appears to lack a modus operandi, so that the scope, strength, and details of its agreements vary widely. Some appear exceedingly generous to the trade partner, while others aggressively promote and protect domestic industries. With respect to services, investment, and other advanced provisions, China tends to fall well short of U.S. standards; yet it also demonstrates greater ambition and flexibility than developing country peers like India and Brazil.
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.