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Institute for Workplace Studies----------------- Professor Samuel B. Bacharach
School of Industrial & Labor Relations-------- Director, Institute for Workplace Studies
Cornell University
16 East 34th Street, 4th floor---------------------- Stuart Basefsky
New York, NY 10016 -------------------------------Director, IWS News Bureau
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Congressional Research Service (CRS)

 

China-U.S. Relations: Current Issues and Implications for U.S. Policy
Kerry Dumbaugh, Specialist in Asian Affairs
November 20, 2009
http://opencrs.com/document/R40457/2009-11-20/download/1013/
[full-text, 39 pages]

 

Summary

The bilateral relationship between the U.S. and the People’s Republic of China (PRC) is vitally

important, touching on a wide range of areas including, among others, economic policy, security,

foreign relations, and human rights. U.S. interests with China are bound together much more

closely now than even a few years ago. These extensive inter-linkages have made it increasingly

difficult for either government to take unilateral actions without inviting far-reaching, unintended

consequences. The Administration of President Barack Obama has inherited from the George W.

Bush Administration not only a greater array of policy mechanisms for pursuing U.S.-China

policy, but a more complex and multifaceted U.S.-China relationship where the stakes are higher

and where U.S. action may increasingly be constrained.

 

Economically, the United States and China have become symbiotically intertwined. China is the

second-largest U.S. trading partner, with total U.S.-China trade in 2008 reaching an estimated

$409 billion. It also is the second largest holder of U.S. securities and the largest holder of U.S.

Treasuries used to finance the federal budget deficit, positioning China to play a crucial role, for

good or ill, in the Obama Administration’s plans to address the recession and the deteriorating

U.S. financial system. At the same time, China’s own substantial levels of economic growth have

depended heavily on continued U.S. investment and trade, making China’s economy highly

vulnerable to a significant economic slowdown in the United States.

 

Meanwhile, other bilateral problems provide a continuing set of diverse challenges. They include

difficulties over the status and well-being of Taiwan, ongoing disputes over China’s failure to

protect U.S. intellectual property rights, the economic advantage China gains from not floating its

currency, and growing concerns about the quality and safety of products exported by China.

China’s more assertive foreign policy and continued military development also have significant

long-term implications for U.S. global power and influence. Some U.S. lawmakers have

suggested that U.S. policies toward China should be reassessed in light of these trends.

 

During the Bush Administration, the U.S. and China cultivated regular high-level visits and

exchanges of working level officials, resumed military-to-military relations, cooperated on antiterror

initiatives, and worked closely on the Six Party Talks to restrain and eliminate North

Korea’s nuclear weapons activities. These and other initiatives of engagement are likely to

continue in some fashion during the Obama presidency. Obama Administration officials already

have made known their views about China’s importance for U.S. interests. Secretary of State

Hillary Clinton included China in her first official trip abroad as Secretary in February 2009,

which included stops in Japan, Indonesia, South Korea, and China (February 20-22). In addition,

the Administration established a new Strategic and Economic Dialogue with the PRC in 2009,

and President Obama in November 2009 made his first official visit to China.

 

This report addresses relevant policy questions in current U.S.-China relations, discusses trends

and key legislation in the current Congress, and provides a chronology of developments and highlevel

exchanges. It will be updated as events warrant. Additional details on the issues discussed

here are available in other CRS products, noted throughout this report. For background

information and legislative action during the 110th Congress, see CRS Report RL33877, China-

U.S. Relations in the 110th Congress: Issues and Implications for U.S. Policy, by Kerry

Dumbaugh. CRS products can be found on the CRS website at http://www.crs.gov/.

 

Contents

Recent Developments..................................................................................................................1

Background and Overview..........................................................................................................1

China’s Importance and Implications for U.S. Policy.............................................................2

Current Issues in U.S.-China Relations........................................................................................3

President Obama State Visit to China, 2009.....................................................................3

Chinese Tire Imports.............................................................................................................4

Global Financial Crisis..........................................................................................................4

Uighur Protests in Xinjiang: July 2009 ..................................................................................5

Military and National Security Issues ....................................................................................6

South China Sea Incidents...............................................................................................7

China’s Growing Military Power.....................................................................................7

PRC Space Activities ......................................................................................................8

Economic and Trade Issues ...................................................................................................9

Currency Valuation .........................................................................................................9

Unfair Trade Subsidies ..................................................................................................10

Intellectual Property Rights ...........................................................................................10

Concerns about Product Safety............................................................................................ 11

Tibet ..................................................................................................................................12

U.S.-PRC Official Dialogues...............................................................................................13

The Strategic and Economic Dialogue (S&ED) .............................................................13

Taiwan...............................................................................................................................15

Prospects for U.S. Taiwan Policy...................................................................................16

U.S. Arms Sales to Taiwan ............................................................................................16

Taiwan’s Bid for U.N. Observer Status..........................................................................17

Resumption of PRC-Taiwan Talks.................................................................................18

China’s Foreign Relations ...................................................................................................20

Environmental Issues ..........................................................................................................22

Domestic Political Issues.....................................................................................................23

Social Stability..............................................................................................................23

Human Rights ...............................................................................................................24

China-Related Legislation in the 111th Congress ........................................................................26

Chronology of Events ...............................................................................................................29

Appendixes

Appendix A. Selected Visits by U.S. and PRC Officials.............................................................32

Appendix B. Selected U.S. Government Reporting Requirements..............................................34

Contacts

Author Contact Information ......................................................................................................36

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This information is provided to subscribers, friends, faculty, students and alumni of the School of Industrial & Labor Relations (ILR). It is a service of the Institute for Workplace Studies (IWS) in New York City. Stuart Basefsky is responsible for the selection of the contents which is intended to keep researchers, companies, workers, and governments aware of the latest information related to ILR disciplines as it becomes available for the purposes of research, understanding and debate. The content does not reflect the opinions or positions of Cornell University, the School of Industrial & Labor Relations, or that of Mr. Basefsky and should not be construed as such. The service is unique in that it provides the original source documentation, via links, behind the news and research of the day. Use of the information provided is unrestricted. However, it is requested that users acknowledge that the information was found via the IWS Documented News Service.

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Stuart Basefsky                   
Director, IWS News Bureau                
Institute for Workplace Studies 
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New York, NY 10016                        
                                   
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