U.S.-China Relations
Congressional research reportSep 3, 2019
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U.S.-China Relations
Susan V. Lawrence, Coordinator
Specialist in Asian Affairs
Caitlin Campbell
Analyst in Asian Affairs
Rachel F. Fefer
Analyst in International Trade and Finance
Jane A. Leggett
Specialist in Energy and Environmental Policy
Thomas Lum
Specialist in Asian Affairs
Michael F. Martin
Specialist in Asian Affairs
Andres B. Schwarzenberg
Analyst in International Trade and Finance
Updated September 3, 2019
Congressional Research Service
7-....
www.crs.gov
R45898
SUMMARY
U.S.-China Relations
The United States and the People’s Republic of China (PRC or China) are involved in a
prolonged stand-off over trade and in competition that is spilling from political and military areas
into a growing number of other spheres, including technology, finance, and education, severely
straining ties on the 40th anniversary of the two countries’ establishment of diplomatic relations.
The two lead the world in the size of their economies, their defense budgets, and their global
greenhouse gas emissions. Both countries are permanent members of the United Nations (U.N.)
Security Council. In 2018, they were each other’s largest trading partners.
During the Trump Administration, competition has dominated the relationship and areas of
cooperation have shrunk. The 2017 National Security Strategy (NSS) describes both China and
Russia as seeking to “challenge American power, influence, and interests, attempting to erode
American security and prosperity.” To pressure China to change its economic practices, the
United States has imposed tariffs on hundreds of billions of dollars of U.S. imports from China,
with almost all imports from China scheduled to be subject to additional tariffs by December 15,
2019. U.S. tariffs and China’s retaliatory tariffs have reordered global supply chains and hit U.S.
farmers and manufacturers particularly hard. Twelve rounds of negotiations have not resolved the
dispute.
On August 5, 2019, the U.S. Treasury Department labeled China a currency manipulator for the
first time in a quarter century. The Administration has placed restrictions on the ability of U.S.
firms to supply PRC telecommunications giant Huawei. The United States has also sought to
warn other nations away from business dealings with Huawei and from cooperation with China
on infrastructure projects under the framework of China’s Belt and Road Initiative (BRI).
R45898
September 3, 2019
Susan V. Lawrence,
Coordinator
Specialist in Asian Affairs
-redacted-@crs.loc.gov
Caitlin Campbell
Analyst in Asian Affairs
-redacted-@crs.loc.gov
Rachel F. Fefer
Analyst in International
Trade and Finance
-redacted-@crs.loc.gov
Jane A. Leggett
Specialist in Energy and
Environmental Policy
-redacted-@crs.loc.gov
Thomas Lum
Specialist in Asian Affairs
-redacted-@crs.loc.gov
Michael F. Martin
Specialist in Asian Affairs
-redacted-@crs.loc.gov
Many analysts ascribe the rising friction in the relationship today not only to the arguably more
Andres B. Schwarzenberg
confrontational inclinations of the Trump Administration, but also to more assertive behavior by
Analyst in International
China under President Xi Jinping. Xi assumed the top posts in the Communist Party of China in
Trade and Finance
November 2012 and added the state presidency in March 2013. Later in 2013, China began
-redacted-@crs.loc.g
building military outposts in the South China Sea and Xi launched BRI, an ambitious effort to
ov
boost economic connectivity—and China’s influence—across the globe. In 2015, China began
enacting a suite of national security legislation that shrank the space for independent thought and
For a copy of the full report,
please call 7-.... or visit
civil society, subjected ordinary citizens to stepped-up surveillance, and imposed onerous
www.crs.gov.
conditions on foreign firms operating in China. The same year, China launched its “Made in
China 2025” plan, seeking to reduce China’s reliance on foreign technology and directing the
considerable resources of the state toward supporting the development of “national champion” Chinese firms in 10 strategic
industries. In 2017, at the end of his first five-year term in his Party posts, Xi tasked China’s military with turning itself into a
“world-class” force by mid-century. Also in 2017, his government began forcing more than 1 million of his Turkic Muslim
fellow citizens in the northwest region of Xinjiang into reeducation camps.
Increasingly, the United States and China appear to be seeking to draw other countries into competing camps—those who
agree to sign (often vague) BRI cooperation agreements with China (some 125 countries as of April 2019, by China’s count),
and those who, at the U.S. government’s behest, do not; those who do business with Huawei, and those who, similarly at the
U.S. government’s behest, do not; those who publicly censure China for its actions in Xinjiang, and those who offer support.
U.S. allies are sometimes in China’s “camp.” China represents “a new kind of challenge,” Secretary of State Michael R.
Pompeo has suggested, because “It’s an authoritarian regime that’s integrated economically into the West in ways the Soviet
Union never was.” Important areas of remaining U.S.-China cooperation include maintaining pressure on North Korea to
curb its nuclear weapons and missile programs; supporting the Afghanistan peace process; managing international public
health challenges, from tuberculosis to influenza; and stemming the flow into the United States of China-produced fentanyl, a
class of deadly synthetic opioids.
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U.S.-China Relations
Contents
Introduction ..................................................................................................................................... 1
Basic Facts About the People’s Republic of China ......................................................................... 5
Leadership ................................................................................................................................. 5
Provinces ................................................................................................................................... 6
Signature Policies of China’s President Xi ............................................................................... 7
Brief History of U.S.-PRC Relations .............................................................................................. 8
The Bilateral Relationship: Select Dimensions .............................................................................. 11
High-Level Dialogues .............................................................................................................. 11
Trade and Economic Relations................................................................................................ 12
Trade ................................................................................................................................. 13
Investment ......................................................................................................................... 14
Military-to-Military Relations ................................................................................................. 15
U.S. Foreign Assistance in China ............................................................................................ 17
Select Issues in the Bilateral Relationship..................................................................................... 19
Economic Issues ...................................................................................................................... 19
Section 301 Investigation and Tariffs ............................................................................... 19
Tariffs on Aluminum and Steel ......................................................................................... 21
Alleged PRC Currency Manipulation ............................................................................... 21
Bilateral Trade Deficit....................................................................................................... 22
Industrial Policies ............................................................................................................. 22
Intellectual Property Rights (IPR) and Cyber-Theft ......................................................... 23
Advanced Technology and Huawei .................................................................................. 23
China’s Status as a “Developing Country” in the WTO ................................................... 25
China’s Belt and Road Initiative (BRI)............................................................................. 26
Security Issues......................................................................................................................... 27
PRC Military Modernization ............................................................................................ 27
North Korea ...................................................................................................................... 28
East China Sea .................................................................................................................. 29
South China Sea ................................................................................................................ 29
Human Rights and Rule of Law .............................................................................................. 31
Xinjiang ............................................................................................................................ 31
Hong Kong ........................................................................................................................ 33
Tibet .................................................................................................................................. 34
Use of Surveillance Technology ....................................................................................... 35
Taiwan ..................................................................................................................................... 36
Select Other Issues .................................................................................................................. 39
Climate Change................................................................................................................. 39
Consular Issues ................................................................................................................. 40
Fentanyl ............................................................................................................................ 40
Legislation Related to China Introduced in the 116th Congress .................................................... 41
China in the National Defense Authorization Act for FY2020 ............................................... 51
Figures
Figure 1. China’s Top Leaders ........................................................................................................ 6
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Figure 2. Map of China ................................................................................................................... 7
Figure 3. The South China Sea ...................................................................................................... 30
Tables
Table 1. Summits Between Presidents Donald J. Trump and Xi Jinping ....................................... 11
Table 2. Trump Administration High-Level Dialogues with China .............................................. 12
Table 3. U.S.-China Trade in 2018 ................................................................................................ 13
Table 4. Select Security and Military Dialogues, 2009-Present .................................................... 17
Table 5. U.S. Foreign Assistance Programs in China (Department of State and USAID),
FY2013-FY2018 ........................................................................................................................ 18
Table 6. U.S. Section 301 Tariff Actions ....................................................................................... 20
Table 7. Trump Administration Notifications of Major Foreign Military Sales to Taiwan .......... 38
Table 8. Legislation with Provisions Related to China Introduced in the 116th Congress,
Arranged by Topic ...................................................................................................................... 42
Table 9. Provisions of H.R. 2500 that refer explicitly to the PRC, Hong Kong, Taiwan, or
entities associated with them ...................................................................................................... 51
Table 10. Provisions of H.R. 2500 potentially related to the PRC, Hong Kong, or Taiwan.......... 52
Table 11. Provisions of S. 1790 that refer explicitly to the PRC, Hong Kong, Taiwan, or
entities associated with them ...................................................................................................... 54
Table 12. Provisions of S. 1790 potentially related to the PRC, Hong Kong, or Taiwan .............. 55
Contacts
Author Contact Information .......................................................................................................... 57
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Introduction
The United States and the People’s Republic of China (PRC or China) are involved in a
prolonged stand-off over trade, and in competition that is spilling from political and military areas
into a growing number of other spheres, including technology, finance, and education, severely
straining ties on the 40th anniversary of the two countries’ establishment of diplomatic relations.
The two countries lead the world in the size of their economies, their defense budgets, and their
global greenhouse gas emissions. Both countries are permanent members of the United Nations
(U.N.) Security Council. In 2018, they were each other’s largest trading partners.
Trump Administration strategy documents have set the tone for U.S. policy toward China. The
December 2017 National Security Strategy (NSS) describes both China and Russia as seeking to
“challenge American power, influence, and interests, attempting to erode American security and
prosperity.”1 An unclassified summary of the January 2018 U.S. National Defense Strategy
describes China as a “strategic competitor” and charges that it is pursuing a military
modernization program that “seeks Indo-Pacific regional hegemony in the near-term and
displacement of the United States to achieve global preeminence in the future.”2 The Department
of Defense’s (DOD’s) June 2019 Indo-Pacific Strategy Report identifies “the primary concern for
U.S. national security” as “inter-state strategic competition, defined by geopolitical rivalry
between free and repressive world order visions.”3 The Trump Administration has leveled its
strongest criticism at China’s economic practices. In a major October 4, 2018, address on China
policy, Vice President Mike Pence charged that China has used “an arsenal of policies
inconsistent with free and fair trade” to build its manufacturing base, “at the expense of its
competitors—especially the United States of America.”4
In their public statements on the United States, China’s top leaders have generally refrained from
direct criticism. In July 2019, PRC Vice President Wang Qishan stated that “profound shifts are
taking place in the relations between major countries,” noting “mounting protectionism and
populist ideologies” and “intensifying geopolitical rivalry and regional turbulence.”5 PRC Vice
Foreign Minister Le Yucheng, speaking at the same forum, addressed U.S.-China relations
directly. The bilateral relationship, Le asserted, is “now going through the most complex and
sensitive period since diplomatic relations were formalized four decades ago.” Le called for “a
China-US relationship based on coordination, cooperation and stability,” and pushed back at the
idea that China is responsible for U.S. “challenges.” The wars in Afghanistan and Iraq “sapped
[U.S.] strategic strength,” Le asserted, and the global financial crisis “exposed the deep-seated
imbalances in the U.S. economy and society.” The United States should not make China “a
1 The White House, National Security Strategy of the United States, December 2017, https://www.whitehouse.gov/wp-
content/uploads/2017/12/NSS-Final-12-18-2017-0905-2.pdf.
2 Department of Defense, “Summary of the 2018 National Defense Strategy,” January 19, 2018,
https://dod.defense.gov/Portals/1/Documents/pubs/2018-National-Defense-Strategy-Summary.pdf.
3 Department of Defense, “Indo-Pacific Strategy Report: Preparedness, Partnerships, and Promoting a Networked
Region,” June 1, 2019, https://media.defense.gov/2019/May/31/2002139210/-1/-1/1/
DOD_INDO_PACIFIC_STRATEGY_REPORT_JUNE_2019.PDF.
4 The White House, “Remarks by Vice President Pence on the Administration’s Policy Toward China,” October 4,
2018, https://www.whitehouse.gov/briefings-statements/remarks-vice-president-pence-administrations-policy-towardchina/.
5 Ministry of Foreign Affairs of the PRC, “Upholding Peace and Cooperation and Building a Community with a Shared
Future for Mankind,” Address by Wang Qishan, Vice President of the PRC, at the opening ceremony of the Eighth
World Peace Forum, July 8, 2019, https://www.fmprc.gov.cn/mfa_eng/wjdt_665385/zyjh_665391/t1679950.shtml.
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scapegoat,” Le argued, for “[p]roblems such as economic disparity, widening wealth gap and
aging infrastructure.”6
U.S.-China tensions predated the Trump Administration. Frictions over such issues as Taiwan,
trade, and China’s human rights record have been long-standing, as have been U.S. concerns
about the intentions behind China’s ambitious military modernization efforts. United States Trade
Representative (USTR) reports to Congress going back to the last years of the George W. Bush
Administration document mounting U.S. frustrations with China’s failure to implement marketopening commitments it made when it acceded to the World Trade Organization (WTO) in
December 2001.7 Previous Administrations concluded, however, that a modus vivendi with China
was necessary for a broad array of U.S. policy objectives in the world, and they thus sought to
balance competition and cooperation in the U.S.-China relationship.8
During the Trump Administration, competition has dominated the relationship and areas of
cooperation have shrunk. To pressure China to change its economic practices, the United States
has imposed tariffs on hundreds of billions of dollars of U.S. imports from China, with almost all
imports from China scheduled to be subject to additional tariffs by December 15, 2019. U.S.
tariffs and China’s retaliatory tariffs have reordered global supply chains and hit U.S. farmers and
manufacturers particularly hard. Twelve rounds of negotiations have not resolved the dispute.
On August 5, 2019, the U.S. Treasury Department labeled China a currency manipulator for the
first time in a quarter century.9 The Administration has placed restrictions on the ability of U.S.
firms to supply PRC telecommunications giant Huawei.10 The United States has also sought to
warn other nations away from business dealings with Huawei and from cooperation with China
on infrastructure projects under the framework of China’s Belt and Road Initiative (BRI). Feeding
a persistent narrative that the Administration seeks to “decouple” the U.S. and Chinese
economies, on August 23, 2019, President Trump wrote on Twitter, “Our great American
companies are hereby ordered to immediately start looking for an alternative to China, including
bringing your companies HOME and making your products in the USA.” As his authority for
such an order, the President cited the International Emergency Economic Powers Act (P.L. 95223), though he said on August 25, 2019, that he had “no plan right now” to trigger the law.11
6 Ministry of Foreign Affairs of the PRC, “China’s Foreign Policy in a Fast Changing World: Mission and
Responsibility,” Speech by Vice Foreign Minister Le Yucheng at the Lunch Meeting of the Eight World Peace Forum,
July 8, 2019, https://www.fmprc.gov.cn/mfa_eng/wjdt_665385/zyjh_665391/t1679454.shtml.
7 See, for example, The United States Trade Representative, “2008 Report to Congress on China’s WTO Compliance,”
https://ustr.gov/sites/default/files/asset_upload_file192_15258.pdf.
8 See, for example, The White House, “America’s Future in Asia,” remarks as prepared for delivery by National
Security Advisor Susan E. Rice at Georgetown University, November 20, 2013, https://obamawhitehouse.archives.gov/
the-press-office/2013/11/21/remarks-prepared-delivery-national-security-advisor-susan-e-rice.
9 U.S. Department of the Treasury, “Treasury Designates China as a Currency Manipulator,” August 5, 2019,
https://home.treasury.gov/news/press-releases/sm751; CRS Insight IN11154, The Administration’s Designation of
China as a Currency Manipulator, by Rebecca M. Nelson.
10 U.S. Department of Commerce, Bureau of Industry and Security, “Addition of Entities to the Entity List,” 84 Federal
Register 22961, May 21, 2019, https://www.federalregister.gov/documents/2019/05/21/2019-10616/addition-ofentities-to-the-entity-list.
11 Donald J. Trump on Twitter, August 23, 2019, https://twitter.com/realdonaldtrump/status/1164914960046133249
and https://twitter.com/realdonaldtrump/status/1165111122510237696; The White House, “Remarks by President
Trump and Prime Minister Johnson of the United Kingdom in Working Breakfast | Biarritz, France,” August 25, 2019,
https://www.whitehouse.gov/briefings-statements/remarks-president-trump-prime-minister-johnson-united-kingdomworking-breakfast-biarritz-france/.
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Many analysts ascribe the rising friction in the relationship today not only to the arguably more
confrontational inclinations of the Trump Administration, but also to more assertive behavior by
China under President Xi Jinping. Xi assumed the top posts in the Communist Party of China in
November 2012 and added the state presidency in March 2013. Later in 2013, China began
building military outposts in the South China Sea and Xi launched BRI, an ambitious effort to
boost economic connectivity—and China’s influence—across the globe. In 2015, China began
enacting a suite of national security legislation that shrank the space for independent thought and
civil society, subjected ordinary citizens to stepped-up surveillance, and imposed onerous
conditions on foreign firms operating in China.12 The same year, China launched its “Made in
China 2025” plan, seeking to reduce China’s reliance on foreign technology and directing the
considerable resources of the state toward supporting the development of “national champion”
Chinese firms in 10 strategic industries.13 In 2017, at the end of his first five-year term in his
Party posts, Xi tasked China’s military with turning itself into a “world-class” force by midcentury.14 That year, his government also began forcing more than 1 million of his Turkic Muslim
fellow citizens in the northwest region of Xinjiang into reeducation camps.15 In March 2018,
China’s Communist Party-controlled legislature amended the state constitution to remove
presidential term-limits, opening the way for Xi to stay in office indefinitely.16
Increasingly, the United States and China appear to be seeking to draw other countries into
competing camps—those who agree to sign (often vague) BRI cooperation agreements with
China (some 125 countries as of April 2019, by China’s count), and those who, at the U.S.
government’s behest, do not; those who do business with Huawei, and those who, similarly at the
U.S. government’s behest, do not; those who publicly censure China for its actions in Xinjiang,
and those who offer support.17 U.S. allies are sometimes in China’s “camp.” China represents “a
new kind of challenge,” Secretary of State Michael R. Pompeo has suggested, because, “It’s an
authoritarian regime that’s integrated economically into the West in ways the Soviet Union never
was.”18 Important areas of remaining U.S.-China cooperation include maintaining pressure on
North Korea to curb its nuclear weapons and missile programs; supporting the Afghanistan peace
process; managing international public health challenges, from tuberculosis to influenza; and
stemming the flow into the United States of China-produced fentanyl, a class of deadly synthetic
opioids.
12 Such legislation includes the National Security Law of the PRC (2015), Anti-Terrorism Law of the PRC (2015),
Cyber Security Law of the PRC (2016), and National Intelligence Law of the PRC (2017).
13 The Chinese-language text of the Made in China 2025 plan, issued on May 19, 2015, is accessible on the website of
China’s State Council, at http://www.gov.cn/zhengce/content/2015-05/19/content_9784.htm.
14 “Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great
Success of Socialism with Chinese Characteristics for a New Era,” Xi Jinping speech delivered at the 19 th National
Congress of the Communist Party of China, October 18, 2017,
http://www.xinhuanet.com/english/download/Xi_Jinping's_report_at_19th_CPC_National_Congress.pdf.
15 For more on these trends, see Carl Minzner, End of an Era: How China’s Authoritarian Revival Is Undermining Its
Rise, Oxford University Press, 2018.
16 See CRS In Focus IF10854, China’s Communist Party Absorbs More of the State, by Susan V. Lawrence.
17 For the number of BRI agreements signed, see Office of the Leading Group for Promoting the Belt and Road
Initiative (PRC), The Belt and Road Initiative Progress, Contributions and Prospects, April 22, 2019,
https://eng.yidaiyilu.gov.cn/zchj/qwfb/86739.htm.
18 U.S. Department of State, “Secretary of State Michael R. Pompeo with Peta Credlin of Sky News,” August 5, 2019,
https://www.state.gov/secretary-of-state-michael-r-pompeo-with-peta-credlin-of-sky-news/, and U.S. Department of
State, “The Special Relationship,” Remarks by Secretary of State Michael R. Pompeo in London, May 8, 2019,
https://www.state.gov/the-special-relationship/.
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Many of the Trump Administration’s critics share the Administration’s concerns about PRC
policies and actions, but disagree with the Administration’s framing of the relationship and with
specific Administration policies. Signatories to an open letter on China addressed to the President
and Members of Congress and published in The Washington Post on July 3, 2019, acknowledge
“troubling behavior” by China. They argue, nonetheless, that China is not “an economic enemy or
an existential national security threat that must be confronted in every sphere; nor is China a
monolith, or the views of its leaders set in stone.” They warn, “If the U.S. presses its allies to treat
China as an economic and political enemy, it will weaken its relations with those allies and could
end up isolating itself rather than Beijing.”19
Former Obama Administration officials Kurt M. Campbell and Jake Sullivan argue that, “The
basic mistake of engagement was to assume that it could bring about fundamental changes to
China’s political system, economy, and foreign policy.” They warn that, “Washington risks
making a similar mistake today, by assuming that competition can succeed in transforming China
where engagement failed—this time forcing capitulation or even collapse.” Campbell and
Sullivan call for “a steady state of clear-eyed coexistence on terms favorable to U.S. interests and
values,” with elements of competition and cooperation in four domains: military, economic,
political, and global governance.20 Peter Varghese, a former senior diplomat for Australia, a U.S.
ally, asserts that, “it would be a mistake for the US to cling to primacy by thwarting China. Those
of us who value US leadership want the US to retain it by lifting its game, not spoiling
China’s.”21
Many analysts fault the Trump Administration for giving up leverage against China by
withdrawing from international agreements and institutions, by allegedly paying insufficient
attention to maintaining strong relationships with allies, and by engaging in inconsistent
messaging around trade, human rights, and other issues. In January 2017, the Administration
notified the 11 other signatories to the Trans-Pacific Partnership (TPP), a proposed free trade
agreement (FTA) of Asia-Pacific countries (not including China), that it would not be ratifying
the agreement.22 In June 2018, the Administration announced its withdrawal from the U.N.
Human Rights Council.23
Signatories of another high-profile open letter addressed to the President urge him, however, to
“stay the course on your path of countering Communist China.” The letter states that supporters
of engagement with China told American policymakers “that the PRC would become a
‘responsible stakeholder’ once a sufficient level of economic modernization was achieved.” The
letter argues, “This did not happen and cannot so long as the CCP [Chinese Communist Party]
rules China.” The letter assures the President, “We welcome the measures you have taken to
19 M. Taylor Fravel, J. Stapleton Roy, Michael D. Swaine, Susan A. Thornton, and Ezra Vogel, “China Is Not an
Enemy,” Washington Post, July 3, 2019, https://www.washingtonpost.com/opinions/making-china-a-us-enemy-iscounterproductive/2019/07/02/647d49d0-9bfa-11e9-b27f-ed2942f73d70_story.html. For an up-to-date list of
signatories, see, “Open Letter to the President and Congress on China Policy,” accessed August 5, 2019,
https://www.openletteronuschina.info/.
20 Kurt M. Campbell and Jake Sullivan, “Competition Without Catastrophe: How America Can Both Challenge and
Coexist with China,” Foreign Affairs, August 1, 2019, https://www.foreignaffairs.com/articles/china/competition-withchina-without-catastrophe.
21 The United States Studies Centre at the University of Sydney, “Australia, the United States and the Indo-Pacific:
Keynote Address Delivered by Peter Varghese AO,” August 21, 2019, https://www.ussc.edu.au/analysis/australia-theunited-states-and-the-indo-pacific-keynote-address-delivered-by-peter-varghese-ao.
22 CRS In Focus IF10000, TPP: Overview and Current Status, by Brock R. Williams and Ian F. Fergusson.
23 CRS Report RL33608, The United Nations Human Rights Council: Background and Policy Issues, by Luisa
Blanchfield.
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confront Xi’s government and selectively to decouple the U.S. economy from China’s insidious
efforts to weaken it.”24
Basic Facts About the People’s Republic of China
The Communist Party of China (CPC) established the PRC 70 years ago, on October 1, 1949,
after winning a civil war against the Nationalist (also known as Kuomintang or KMT) forces of
the Republic of China (ROC) led by Chiang Kai-shek. Today, China is the world’s most populous
nation (with a population of 1.39 billion), the world’s largest emitter of greenhouse gases
(responsible for approximately 30% of global energy-related carbon dioxide emissions in 2016),
the world’s second-largest economic power (in nominal terms, with a gross domestic product or
GDP of $13.6 trillion), and the only Communist Party-led state in the G-20 grouping of major
economies. With the United States, France, Russia, and the United Kingdom, China is also one of
five permanent members of the U.N. Security Council.
Leadership
Since 2012, Xi Jinping (his family name, Xi, is pronounced “shee”) has been China’s top leader.
He holds a troika of top positions: Communist Party General Secretary, Chairman of the Party’s
Central Military Commission, and State President. In 2018, China’s unicameral legislature, the
National People’s Congress (NPC), amended the PRC constitution to include a reference to “Xi
Jinping Thought on Socialism with Chinese Characteristics for a New Era,” putting Xi’s guiding
philosophy on a par with the philosophies of two powerful predecessors, Mao Zedong and Deng
Xiaoping. Another constitutional amendment removed term limits for the state presidency,
opening the way for Xi to stay in the position indefinitely after the conclusion of his second fiveyear term in 2023.25
Xi is the top official in China’s most senior decisionmaking body, the seven-man Communist
Party’s Politburo Standing Committee (see Figure 1), which is drawn from the larger 25-person
Politburo. Xi personally chairs multiple Communist Party policy committees, including those on
foreign affairs, Taiwan, “deepening overall reform,” financial and economic affairs, cyberspace,
and “comprehensive rule of law.” Some foreign observers refer to him as “chairman of
everything.”26 Other members of the Politburo Standing Committee concurrently lead China’s
other major political institutions, including the State Council, China’s cabinet; the NPC; and a
political advisory body, the Chinese People’s Political Consultative Conference (CPPCC). The
arrangement ensures that the Communist Party maintains firm control over all the country’s
political institutions. Xi has repeatedly reminded his countrymen that, “The Party exercises
overall leadership over all areas of endeavor in every part of the country.”27
24 James E. Fannell, Captain USN (Ret.) “Stay the Course on China: An Open Letter to President Trump,” Journal of
Political Risk, July 18, 2019, http://www.jpolrisk.com/stay-the-course-on-china-an-open-letter-to-president-trump/.
Fannell is a former Director of Intelligence and Information Operations, U.S. Pacific Fleet.
25 See CRS In Focus IF10854, China’s Communist Party Absorbs More of the State, by Susan V. Lawrence.
26 Jane Perlez, “Q. and A.: Geremie R. Barmé on Understanding Xi Jinping,” New York Times, November 8, 2015,
https://sinosphere.blogs.nytimes.com/2015/11/08/china-xi-jinping-geremie-barme-maoing-xi-jinping/.
27 “Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great
Success of Socialism with Chinese Characteristics for a New Era,” Xi Jinping speech delivered at the 19 th National
Congress of the Communist Party of China, October 18, 2017,
http://www.xinhuanet.com/english/download/Xi_Jinping's_report_at_19th_CPC_National_Congress.pdf.
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Figure 1. China’s Top Leaders
Members of the Seven-Man Communist Party Politburo Standing Committee
Source: Website of the Communist Party of China, http://www.cpcnews.cn.
Notes: Leaders are listed in rank order, with Xi Jinping ranked no. 1 and Han Zheng ranked no. 7.
Provinces
China presents itself as comprised of 34 provincial-level administrative units (see Figure 2).
They include 23 provinces; five geographic entities that China calls “autonomous regions,” all of
which have significant ethnic minority populations (Guangxi, Inner Mongolia, Ningxia, Tibet,
and Xinjiang); four municipalities that report directly to the central government (Beijing,
Chongqing, Shanghai, and Tianjin); and the two special administrative regions of Hong Kong and
Macau, which were returned to China in the 1990s by the governments of the United Kingdom
and Portugal respectively. The PRC’s count of 23 provinces includes Taiwan, an island
democracy of 23 million people that the PRC has never controlled, but over which it claims
sovereignty. Taiwan calls itself the Republic of China.
Provinces have their own revenue streams, and governments at the provincial level and below are
responsible for the lion’s share of the country’s public expenditure, including almost all public
spending on education, health, unemployment insurance, social security, and welfare.28 Provinces
also have the right to pass their own laws and regulations, which may extend national laws and
regulations, but not conflict with them. Beijing gives provinces considerable leeway in adopting
policies to boost economic growth and encourages provinces to undertake approved policy
experiments. Provinces do not have their own constitutions, however, and do not have the power
to appoint their own leaders.29
28 Tony Saich, Governance and Politics of China, 3rd ed. (Palgrave Macmillan, 2011), p. 200.
29 CRS Report R41007, Understanding China’s Political System, by Susan V. Lawrence and Michael F. Martin.
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Figure 2. Map of China
Showing Provincial-Level Administrative Jurisdictions
Source: Created by CRS. Map information from U.S. Department of State and Esri 2018 Data and Maps.
Notes: (1) Beijing, Chongqing, Shanghai, and Tianjin are cities with the administrative status of provinces. (2)
Hong Kong and Macau are special administrative regions of China with the administrative status of provinces. (3)
The PRC claims sovereignty over Taiwan, but has never controlled it. Taiwan officially calls itself the Republic of
China. (4) This map abbreviates the name of Afghanistan as “AFGH” and that of Tajikistan as “TJK.”
Signature Policies of China’s President Xi
President Xi has sought to rally China’s citizens around a “China Dream of Great Rejuvenation
of the Chinese Nation.” The China Dream incorporates a pledge to build “a moderately
prosperous society in all respects” by 2021, the centenary of the Party’s founding, in part by
doubling China’s 2010 GDP and per capita income for both urban and rural residents. It also
includes a pledge to make China, “a modern socialist country that is prosperous, strong,
democratic, culturally advanced, and harmonious” by 2049, the centenary of the founding of the
People’s Republic of China.30 (The term “democratic” refers to Chinese-style “socialist
30 “The Two Centennial Goals,” China.org.cn, November 18, 2014, http://www.china.org.cn/english/china_key_words/
2014-11/18/content_34158771.htm. “Full text of Hu Jintao’s report at 18th Party Congress,” Xinhua News Agency
(English), November 17, 2012.
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democracy” under uncontested Communist Party rule.) The “China Dream” includes a “dream of
a strong military.”31
Externally, Xi has promoted his vision of a “community with a shared future for mankind”
(also translated as “community of common destiny for mankind”). In a January 2017 speech at
the U.N. office in Geneva, Xi described the “community with a shared future” as an effort to
“establish a fair and equitable international order.” In such an order, he said, there should be no
interference in countries’ internal affairs, and all countries should “have the right to independently
choose their social system and development path,” an implicit rejection of U.S.-led democracypromotion efforts around the world. Appearing to address the United States directly, he stated,
“Big countries should treat smaller ones as equals instead of acting as a hegemon imposing their
will on others. No country should open the Pandora’s box by willfully waging wars or
undermining the international rule of law.”32
At the CPC’s 19th Congress in late 2017, the CPC incorporated the “community with a shared
future for mankind” into its charter. Xi boasted of “a further rise in China’s international
influence, ability to inspire, and power to shape” and said China was “moving closer to center
stage.”33 In March 2018, China incorporated the “community with a shared future for mankind”
into the state constitution. Later that year, Xi pledged that China would play “an active part in
leading the reform of the global governance system, and build a more complete network of global
partnerships.”34
Brief History of U.S.-PRC Relations
After the Communist Party took power in China in 1949, the United States continued to recognize
Chiang Kai-shek’s ROC government on Taiwan as the legitimate government of all China. A year
later, the United States and China found themselves on opposite sides of the Korean War, a
conflict that killed 36,547 U.S. military personnel and at least 180,000 Chinese military
personnel.35 China’s name for the conflict is the “War to Resist U.S. Aggression and Aid Korea.”
Early in the conflict, the United States sent its Seventh Fleet to the Taiwan Strait “to prevent the
Korean conflict from spreading south,” effectively preventing Communist forces from realizing
their goal of finishing the Chinese Civil War by wresting control of Taiwan from Chiang’s
forces.36
31 “Building a Strong Army Through Reform,” Xinhua, March 16, 2016, http://www.xinhuanet.com//mil/2016-03/16/
c_128804009.htm.
32 “Work Together to Build a Community of Shared Future for Mankind,” Xi Jinping speech at the United Nations
Office at Geneva, China Global Television Network (CGTN), January 18, 2017, https://america.cgtn.com/2017/01/18/
full-text-of-xi-jinping-keynote-speech-at-the-united-nations-office-in-geneva.
33 “Secure a Decisive Victory in Building a Moderately Prosperous Society in All Respects and Strive for the Great
Success of Socialism with Chinese Characteristics for a New Era,” Xi Jinping speech to the 19th National Congress of
the Communist Party of China, October 18, 2017.
34 “Xi Urges Breaking New Ground in Major Country Diplomacy with Chinese Characteristics,” Xinhua, June 24,
2018, http://www.xinhuanet.com/english/2018-06/24/c_137276269.htm.
35 CRS Report RL32492, American War and Military Operations Casualties: Lists and Statistics, by Nese F.
DeBruyne; Yan Jie, “180,000 Chinese Soldiers Killed in Korean War,” China Daily, June 28, 2010,
http://www.chinadaily.com.cn/china/2010-06/28/content_10026788.htm. China has never provided official casualty
figures. Western scholars’ estimates of Chinese deaths in the Korean War range from 400,000 to 600,000.
36 U.S. Department of State, Office of the Historian, “The Taiwan Strait Crises: 1954-1955 and 1958,”
https://history.state.gov/milestones/1953-1960/taiwan-strait-crises.
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In 1971, changing Cold War dynamics, including the Sino-Soviet split, led the Nixon
Administration to undertake a profound shift in U.S. policy. Then-Secretary of State Henry
Kissinger made a secret visit to China in July 1971. In October of the same year, the United
States supported U.N. General Assembly Resolution 2758, recognizing the PRC’s representatives
as “the only legitimate representatives of China to the United Nations,” and expelling “the
representatives of Chiang Kai-shek.”37 President Richard Nixon formally ended nearly a quarter
of a century of estrangement between the United States and the PRC with his historic visit to
China in February 1972.
On January 1, 1979, President Jimmy Carter and China’s Deng Xiaoping presided over the
establishment of diplomatic relations between their two nations. The joint communiqué they
signed, one of three that China considers to lay the foundation for the U.S.-China relationship,
states that the United States “acknowledges the Chinese position that there is but one China and
Taiwan is part of China.” It also states that “the people of the United States will maintain cultural,
commercial, and other unofficial relations with the people of Taiwan.”38 In April 1979, Carter
signed the Taiwan Relations Act (P.L. 96-8, U.S.C. 3301 et seq.), providing a legal basis for the
unofficial U.S. relationship with Taiwan and committing the United States to sell defensive arms
to Taiwan. The same year, Deng launched a bold program of “reforming and opening” to the
outside world that would transform China from a backward, isolated country into the economic
powerhouse, emerging military power, and shaper of global institutions that it is today.
Through the 1970s and 1980s, the overriding strategic rationale for the U.S.-China relationship
was counterbalancing a shared enemy, the Soviet Union. With the collapse of the Soviet Union in
1991, U.S. and Chinese leaders cast about for a new rationale for their relationship. President Bill
Clinton and China’s then-leader Jiang Zemin both came to see benefits in expanding bilateral
economic ties, including by working together to bring China into the WTO. On October 10, 2000,
Clinton signed into law P.L. 106-286, granting China permanent normal trade relations and
paving the way for China to join the WTO, which it did in December 2001. In 2018, the Trump
Administration argued that “the United States erred in supporting China’s entry into the WTO on
terms that have proven to be ineffective in securing China’s embrace of an open, market-oriented
trade regime.”39 A former George W. Bush Administration official suggests that “identifying a
preferable alternative, even with the benefit of hindsight, is surpassingly difficult.”40
After the terrorist attacks of September 11, 2001, the George W. Bush Administration settled on
counterterrorism cooperation as a new strategic rationale for the U.S.-China relationship, but
China complicated that rationale when it persuaded the United States to apply a terrorist label to
separatist ethnic Uyghurs from its northwest Xinjiang region.41 During the Obama
Administration, even as U.S.-China friction mounted over economic issues, cyber espionage,
human rights, and the South China Sea, the two sides embraced as a strategic rationale for their
relationship the need for their cooperation to address some of the world’s most pressing
37 U.N. General Assembly 26th Session, Resolution 2758, “Restoration of the Lawful Rights of the People’s Republic of
China in the United Nations,” October 25, 1971.
38 U.S. Department of State Office of the Historian, “Address by President Carter to the Nation,” December 15, 1978,
https://history.state.gov/historicaldocuments/frus1977-80v01/d104.
39 U.S. Trade Representative, “2017 USTR Report to Congress on China’s WTO Compliance,” January 2018, p. 2,
https://ustr.gov/sites/default/files/files/Press/Reports/China%202017%20WTO%20Report.pdf.
40 Philip Levy, “Was Letting China into the WTO a Mistake? Why There Were No Better Alternatives,” Foreign
Affairs, April 2, 2018, https://www.foreignaffairs.com/articles/china/2018-04-02/was-letting-china-wto-mistake.
41 See Richard Bernstein, “When China Convinced the U.S. That Uighurs Were Waging Jihad,” The Atlantic, March
19, 2019, https://www.theatlantic.com/international/archive/2019/03/us-uighurs-guantanamo-china-terror/584107/.
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challenges, including weak global economic growth, climate change, and nuclear proliferation.42
Observers broadly credited U.S.-China cooperation for contributing to the conclusion of the July
2015 Joint Comprehensive Plan of Action (JCPOA) nuclear deal with Iran and the December
2015 Paris Agreement under the U.N. Framework Convention on Climate Change.43
Over the past four decades, the U.S.-China relationship has faced some high-profile tests:
In June 1989, a decade after normalization of U.S.-China relations, China’s
leaders ordered the People’s Liberation Army (PLA) to clear Beijing’s
Tiananmen Square of peaceful protestors, killing hundreds, or more. In response,
the United States imposed sanctions on China, some of which remain in place
today.44
In 1995-1996, a U.S. decision to allow Taiwan President Lee Teng-hui to make a
private visit to the United States and deliver a speech at his alma mater, Cornell
University, led to what became known as the Third Taiwan Strait Crisis. China
expressed its anger at the visit by conducting a series of missile exercises around
Taiwan, prompting the Clinton Administration to dispatch two aircraft carrier
battle groups to the area.45
In May 1999, two decades after normalization of U.S.-China relations, a U.S. Air
Force B-2 bomber involved in North Atlantic Treaty Organization (NATO)
operations over Yugoslavia mistakenly dropped five bombs on the Chinese
Embassy in Belgrade, killing three Chinese journalists and injuring 20 embassy
personnel. The event set off anti-U.S. demonstrations in China, during which
protestors attacked U.S. diplomatic facilities.46
In April 2001, a PLA naval J-8 fighter plane collided with a U.S. Navy EP-3
reconnaissance plane over the South China Sea, killing the Chinese pilot. The
U.S. crew made an emergency landing on China’s Hainan Island, where Chinese
authorities detained them for 11 days. Negotiations for return of the U.S. plane
took much longer.47
In February 2012, a Chongqing Municipality Vice Mayor sought refuge in the
U.S. consulate in the western China city of Chengdu, where he is believed to
42 Other issues on which the Obama White House sought to cooperate with China included North Korea, Afghanistan,
global public health, international development, the transnational flow of terrorist fighters, wildlife trafficking, and
ocean conservation.
43 See CRS Report R43333, Iran Nuclear Agreement and U.S. Exit, by Paul K. Kerr and Kenneth Katzman, and CRS
Report R44609, Climate Change: Frequently Asked Questions About the 2015 Paris Agreement, by Jane A. Leggett
and Richard K. Lattanzio.
44 See CRS Report R44605, China: Economic Sanctions, by Dianne E. Rennack.
45 See CRS Report R44996, Taiwan: Issues for Congress, by Susan V. Lawrence and Wayne M. Morrison.
46 U.S. Department of State, “Thomas Pickering, Under Secretary of State, Oral Presentation to the Chinese
Government Regarding the Accidental Bombing of The P.R.C. Embassy in Belgrade,” June 17, 1999, https://19972001.state.gov/policy_remarks/1999/990617_pickering_emb.html; U.S. Department of State, “China—Property
Damage Agreements,” December 16, 1999, https://1997-2001.state.gov/briefings/statements/1999/ps991216b.html.
The United States agreed to pay China $28 million for damage to the Chinese Embassy in Belgrade. China agreed to
pay the United States $2.87 million for damage to U.S. diplomatic facilities in China.
47 John Keefe, “A Tale of ‘Two Very Sorries’ Redux,” Far Eastern Economic Review, March 21, 2002, available
online at http://www.freerepublic.com/focus/f-news/646427/posts; Association for Diplomatic Studies and Training,
“A U.S.-Chinese Mid-Air Collision and ‘The Letter of Two Sorries,’ https://adst.org/2016/04/a-u-s-chinese-mid-aircollision-and-the-letter-of-two-sorries/.
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have shared explosive information about wrongdoing by his then-boss, an
ambitious Politburo member. Thirty-six hours later, U.S. officials handed the
Vice Mayor over to officials from Beijing. The Politburo member, Bo Xilai, soon
fell from grace in one of the most spectacular political scandals in PRC history.48
In April 2012, after Chinese legal advocate Chen Guangcheng, who is blind,
escaped house arrest in China’s Shandong Province, the U.S. Embassy in China
rescued him from the streets of Beijing and brought him into the U.S. Embassy
compound, where he stayed for six days. High-stakes negotiations between U.S.
and PRC diplomats led to Chen moving first to a Beijing hospital, and then, in
May 2012, to the United States.49
The Bilateral Relationship: Select Dimensions
High-Level Dialogues
Presidents Trump and Xi have met face-to-face five times: three times in 2017, once in 2018, and
once in 2019 (see Table 1). Three of their five meetings have been on the sidelines of summits of
the G-20 nations. Even as he has excoriated PRC policies, Trump has generally described his
relationship with Xi in warm terms, frequently referring to Xi as “my friend.” Writing on Twitter
on August 23, 2019, he questioned whether the Federal Reserve chairman or Xi “is our bigger
enemy.”50 Three days later, however, the President wrote on Twitter that Xi is “a great leader &
representing a great country” and stated publicly, “I have great respect for President Xi.”51
Table 1. Summits Between Presidents Donald J. Trump and Xi Jinping
Date of Meeting
Venue
April 6-7, 2017
Mar-a-Lago Estate, Palm Beach, FL, during President Xi’s visit to the United States
July 8, 2017
Hamburg, Germany, on sidelines of a G-20 summit
November 8-10, 2017
Beijing, China, during President Trump’s state visit to China
December 1, 2018
Buenos Aires, Argentina, on sidelines of a G-20 summit
June 29, 2019
Osaka, Japan, on the sidelines of a G-20 summit
Source: The White House.
In their April 2017 meetings, Trump and Xi agreed to establish four high-level dialogues to
manage the U.S.-China relationship, replacing dialogues that operated during the Obama
Administration (see Table 2).52 All of the dialogues convened in 2017. Perhaps reflecting
48 See Max Fisher, “Clinton Reveals U.S. Role in High-Level 2012 Incident with China,” The Washington Post,
October 18, 2013, https://www.washingtonpost.com/news/worldviews/wp/2013/10/18/clinton-reveals-u-s-role-in-highlevel-2012-incident-with-china/.
49 See CRS Report R42554, U.S.-China Diplomacy Over Chinese Legal Advocate Chen Guangcheng, by Susan V.
Lawrence and Thomas Lum.
50 Donald J. Trump on Twitter, August 23, 2019, https://twitter.com/realdonaldtrump/status/1164914610836783104;
The White House, “Remarks by President Trump and President El-Sisi of the Arab Republic of Egypt Before Bilateral
Meeting | Biarritz, France,” August 26, 2019, https://www.whitehouse.gov/briefings-statements/remarks-presidenttrump-president-el-sisi-arab-republic-egypt-bilateral-meeting-biarritz-france/.
51 Donald J. Trump on Twitter, August 26, 2019, https://twitter.com/realdonaldtrump/status/1165919483191599104.
52 U.S. Department of State, “Previewing the U.S.-China Diplomatic and Security Dialogue,” briefing by Acting
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vacancies in senior positions in the Trump Administration and rising tensions in the U.S.-China
relationship, only the Diplomatic and Security Dialogue (D&SD) convened in 2018.53 None of
the dialogues has convened in 2019.
Table 2. Trump Administration High-Level Dialogues with China
Established April 2017
Dialogue Name
U.S. Cochair(s)
PRC Cochair
Dates Convened
Diplomatic and Security
Dialogue (D&SD)
Secretary of State and
Secretary of Defense
Politburo
Member/Director of
Communist Party Central
Committee Foreign
Affairs Commission Office
(Minister of Defense also
participated in second
meeting, but the PRC
does not consider him a
cochair.)
June 2017, November
2018
Comprehensive Economic
Dialogue
Secretary of the Treasury
and Secretary of
Commerce
Politburo Member/Vice
Premier
June 2017
Law Enforcement and
Cybersecurity Dialogue
Attorney General and
Secretary of Homeland
Security
Politburo Member
responsible for police and
judiciary
October 2017
Social and Cultural Issues
Dialogue
Secretary of State
Politburo
Member/Director of
Communist Party Central
Committee Foreign
Affairs Commission Office
September 2017
Source: White House, State Department, and Xinhua News Agency.
Trade and Economic Relations54
U.S.-China trade and economic relations have expanded significantly over the past three decades.
In 2018, China was—in terms of goods—the United States’ largest trading partner, third-largest
export market, and largest source of imports. China is also the largest foreign holder of U.S.
Treasury securities.55 The economic relationship has grown increasingly fraught, however. In
2017, the Trump Administration launched an investigation into China’s policies on intellectual
property (IP), subsidies, advancing technology, and spurring innovation. Beginning in 2018, the
Trump Administration imposed tariffs on $250 billion worth of Chinese imports.56 Tariffs appear
Assistant Secretary of State for East Asian and Pacific Affairs Susan Thornton, June 19, 2017, https://www.state.gov/r/
pa/prs/ps/2017/06/272014.htm.
53 Office of the Spokesman, U.S. Department of State, “U.S.-China Diplomatic and Security Dialogue,” Media Note,
November 9, 2018, https://www.state.gov/u-s-china-diplomatic-and-security-dialogue-3/.
54 Unless otherwise noted, data in this section is from U.S. Department of Commerce, Bureau of Economic Analysis.
55 U.S. Department of the Treasury, “Foreign Residents’ Portfolio Holdings of U.S. Securities,” April 30, 2019,
https://www.treasury.gov/resource-center/data-chart-center/tic/Pages/shlreports.aspx.
56 The White House, “Presidential Memorandum on the Actions by the United States Related to the Section 301
Investigation,” March 22, 2018, https://www.whitehouse.gov/presidential-actions/presidential-memorandum-actionsunited-states-related-section-301-investigation/. For more detail, see CRS Insight IN10943, Escalating U.S. Tariffs:
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to have contributed to a sharp contraction in U.S.-China trade in the first half of 2019. On August
1, 2019, President Trump stated that beginning on September 1, 2019, the United States would
impose 10% tariffs on nearly all remaining imports from China.57 His Administration later
exempted some goods from the 10% tariffs and delayed the imposition of tariffs on other goods,
but on August 23, 2019, the President also announced his intention to raise the tariff rate for these
remaining imports from 10% to 15%.58 The President has sometimes suggested what some
observers characterize as an ambivalence toward the trade relationship. In reference to the
persistent large size of the U.S. trade deficit with China, the President stated on August 1, 2019,
“If they don’t want to trade with us anymore, that would be fine with me. We’d save a lot of
money.”59
Trade
According to U.S. trade data, U.S. exports of goods and services to China totaled $178.0 billion
(7.1% of total U.S. exports) in 2018, while imports from China amounted to $558.8 billion
(17.9% of total U.S. imports). As a result, the overall bilateral deficit was $380.8 billion, up $43.6
billion (12.9%) from 2017.
Trade in Goods
U.S. goods exports to China totaled $120.8 billion in 2018, a 7.3% ($9.4 billion) decrease from
the 2017 level (see Table 3). The value of U.S. goods imports from China was $540.4 billion over
the same period, up 6.8% ($34.4 billion) from 2017. The decrease in U.S. exports and increase in
U.S. imports resulted in a $43.8 billion (11.7%) increase in the bilateral trade deficit, to $419.6
billion. Exports to China accounted for 7.2% of all U.S. goods exports, while imports from China
accounted for 21.1% of all U.S. goods imports.
Table 3. U.S.-China Trade in 2018
U.S.$ (billions)
% Change from
2017*
Total U.S. Exports to China
178.0
-4.5
Exports of Goods
120.8
-7.3
Exports of Services
57.1
2.0
Total U.S. Imports from China
558.8
6.7
Imports of Goods
540.4
6.8
Imports of Services
18.3
5.1
Total Balance (Deficit)
-380.8
12.9
Balance on Goods (Deficit)
-419.6
11.7
Balance on Services (Surplus)
38.8
0.6
Timeline, coordinated by Brock R. Williams; CRS Insight IN10971, Escalating U.S. Tariffs: Affected Trade,
coordinated by Brock R. Williams; and CRS Insight IN11135, U.S. Trade Friction with China Intensifies, by Wayne
M. Morrison.
57 President Donald J. Trump on Twitter, August 1, 2019, https://twitter.com/realdonaldtrump/status/
1156979446877962243.
58 Donald J. Trump on Twitter, August 23, 2019, https://twitter.com/realdonaldtrump/status/1165005929831702529.
59 The White House, “Remarks by President Trump Before Marine One Departure,” August 1, 2019,
https://www.whitehouse.gov/briefings-statements/remarks-president-trump-marine-one-departure-56/.
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Source: U.S. Bureau of Economic Analysis, Department of Commerce, June 20, 2019.
Note: *not adjusted for inflation.
Top U.S. goods exports to China in 2018 were capital goods, not including automotive products
($52.9 billion or 43.8% of U.S. goods exports to China), industrial supplies ($40 billion or
33.1%), and automotive vehicles and parts ($10.4 billion or 8.6%). Leading U.S. goods imports
from China were consumer goods, not including food and automotive ($248.2 billion or 45.9% of
U.S. goods imports from China), industrial supplies ($55.6 billion or 10.3%), and automotive
vehicles and parts ($23.1 billion or 4.28%).
China has levied retaliatory tariffs on most U.S. agricultural and food products. The tariffs
reportedly contributed to the sharp overall decline of these exports to China (particularly of U.S.
soybeans) in 2018.60 Total U.S. agricultural exports to China amounted to $9.1 billion, a decline
of 53.0% from 2017, while the value of U.S. agricultural imports from China was $4.9 billion, up
8.9% from 2017.61 China’s share of total U.S. agricultural exports declined from 14.1% in 2017
to 6.6% in 2018.
Trade in Services
In 2018, U.S. services exports to China totaled $57.1 billion (up 2.0% or $1.1 billion), while U.S.
imports of services from China grew 5.1% ($887 million) to $18.3 billion. The bilateral trade
surplus in services stood at $38.8 billion (up 0.6% from 2017). Exports to China accounted for
6.9% of all U.S. services exports, while imports from China accounted for 3.2% of all U.S.
services imports.
Travel represented the largest category of U.S. services exports to China, accounting for 56.1%
($32.1 billion). Other significant categories were charges for the use of IP rights (14.8% of all
services exports to China or $8.5 billion) and transport (9.3% or $5.3 billion). Leading U.S.
services imports from China were transport (27.4% of all services imports from China or $5.0
billion) and travel (24.7% or $4.5 billion).
Investment
Foreign Direct Investment62
Despite a surge in U.S. foreign direct investment (FDI) in China following the PRC’s entry into
the World Trade Organization (WTO) in 2001, levels of investment have remained relatively low.
China’s foreign investment regulatory regime, combined with policies or practices that favor
state-owned enterprises (SOEs), has traditionally limited the sectors open to—and levels of—
foreign investment. Amid trade tensions, a U.S. vetting regime with a newly broadened scope for
reviewing certain foreign investments for national security implications, and tighter Chinese
regulations on capital outflows, Chinese FDI in the United States has slowed since 2016.
60 For more detail, see CRS In Focus IF11085, China’s Retaliatory Tariffs on U.S. Agricultural Products, by Jenny
Hopkinson, and CRS Report R45448, Profiles and Effects of Retaliatory Tariffs on U.S. Agricultural Exports, by Jenny
Hopkinson.
61 U.S. Department of Agriculture, USDA Global Access Trading System (GATS), FATUS Total Agricultural Exports
and Imports.
62 For more detail, see CRS In Focus IF11283, U.S.-China Investment Ties: Overview and Issues for Congress, by
Andres B. Schwarzenberg.
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According to the U.S. Bureau of Economic Analysis, net U.S. FDI flows to China in 2018—the
most recent year for which data are available—were $7.6 billion (down 22.9% from 2017), while
net Chinese FDI flows into the United States were negative (-$754 million, compared to $25.4
billion in 2016), as outflows exceeded inflows (e.g., asset divestitures).63 Additionally, the stock
of U.S. FDI in China was $116.5 billion (up 8.3% from 2017), while that of China in the United
States was $60.2 billion (up 3.7%), on an ultimate beneficiary ownership (UBO) basis.64 China
accounts for approximately 2.0% of total U.S. FDI stock abroad.
China’s Holdings of U.S. Treasury Securities
As of May 2019, approximately three-fourths (or $1.1 trillion) of China’s total U.S. public and
private holdings are Treasury securities, which investors generally consider to be “safe-haven”
assets.65 Chinese ownership of these securities has decreased in recent years from its peak of $1.3
trillion in 2011. Nevertheless, it remains significantly higher than in 2002, both in dollar terms
(up over $1 trillion) and as a percentage of total foreign holdings (from 8.5% to 17.0%). In 2009,
China overtook Japan to become the largest foreign holder of Treasury securities.
Military-to-Military Relations
The United States and China formalized military ties in 1979, the year the two countries
established diplomatic relations, although they had cooperated on some security issues
previously. The two countries enjoyed high levels of military cooperation until the PRC’s 1989
military crackdown in Tiananmen Square, after which the United States suspended military
engagement. The Clinton Administration in 1993 resumed military ties, reportedly in an attempt
to reassure Chinese military leaders of the United States’ benign intentions toward China, but
military relations never again achieved the scope and depth of the previous decade.66
China on several occasions suspended military ties when it perceived the United States to have
harmed Chinese interests (for example, in response to U.S. arms sales to Taiwan). In 1999,
Congress included a provision in the National Defense Authorization Act for FY2000 (P.L. 10665) placing restrictions on military relations with China. The act states that the Secretary of
Defense may not authorize any military contact with the PLA that would “create a national
security risk due to an inappropriate exposure” of the PLA to 12 operational areas of the U.S.
military.67
In recent years, U.S.-China military exchanges have included high-level visits, recurrent
exchanges between defense officials, and functional and academic exchanges (see Table 4).
63 U.S. Department of Commerce, Bureau of Economic Analysis, “International Data: Direct Investment and MNE,”
July 24, 2019.
64 FDI stock, or FDI position, captures the cumulative value of investments at a single point in time. According to the
U.S. Bureau of Economic Analysis, ultimate beneficiary ownership refers to the “person, or entity, that ultimately owns
or controls a U.S. affiliate of a foreign company and that derives the benefits associated with ownership or control.”
65 U.S. Department of the Treasury, “Foreign Residents' Portfolio Holdings of U.S. Securities,” April 30, 2019.
66 Robert G. Sutter, Shaping China’s Future in World Affairs: The Role of the United States, 1996.
67 The 12 areas are force projection operations, nuclear operations, advanced combined-arms and joint combat
operations, advanced logistical operations, chemical and biological defense and other capabilities related to weapons of
mass destruction, surveillance and reconnaissance operations, joint warfighting experiments and other activities related
to transformations in warfare, military space operations, other advanced capabilities, arms sales or military-related
technology transfers, release of classified or restricted information, and access to a U.S. Department of Defense
laboratory. The FY2000 NDAA (P.L. 106-65) requires the Secretary of Defense to inform Congress annually about any
contacts with the PLA that violate the act.
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According to U.S. Department of Defense (DOD) reports, the frequency of these engagements
has declined in recent years, from 30 in 2016 to 12 planned for 2019.68 The two militaries also
occasionally engage in multilateral fora, such as multinational military exercises, and coordinate
or de-conflict activities such as counterpiracy patrols in the Gulf of Aden.
DOD reporting indicates U.S. objectives for military-to-military relations with China have
narrowed in recent years from a broader focus on building trust and fostering cooperation on
security issues of mutual interest to a narrower focus on risk reduction.69 The Trump
Administration has been more vocal than past Administrations in expressing its concerns about
China’s military, and frictions have occasionally flared into public view. Eighteen “unsafe and/or
unprofessional interactions” between U.S. and PRC military forces in the maritime realm have
occurred since 2016, according to a U.S. Pacific Fleet spokesperson.70
In late May 2018, the United States disinvited China from the 2018 iteration of the biennial U.S.led multinational Rim of the Pacific (RIMPAC) maritime exercise in response to China’s
continued militarization of its outposts in the South China Sea.71 In September 2018, the U.S.
Treasury Department sanctioned the PLA’s Equipment Development Department and its head for
arms purchases from Russia under the Countering America’s Adversaries through Sanctions Act
(CAATSA) (P.L. 115-44).72 The PRC’s response to that action, and a September 2018 U.S. arms
sale to Taiwan, included suspension of the two militaries’ year-old Joint Staff Dialogue.73
These tensions notwithstanding, both countries appear committed to military-military
engagement. Then-U.S. Secretary of Defense Jim Mattis and Chinese Defense Minister Wei
Fenghe met three times in 2018.74 At a meeting of the two countries’ Diplomatic and Security
Dialogue in November 2018, they “recognized that the U.S.-China military-to-military
68 U.S. Department of Defense, Annual Report to Congress: Military and Security Developments Involving the People’s
Republic of China 2019, May 2, 2019, p. 119; U.S. Department of Defense, Annual Report to Congress: Military and
Security Developments Involving the People’s Republic of China 2018, May 16, 2018, pp. 106-109; U.S. Department of
Defense, Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China
2017, May 15, 2017, pp. 85-89; Department of Defense, Annual Report to Congress: Military and Security
Developments Involving the People’s Republic of China 2016, April 26, 2016, pp. 96-101.
69 DOD’s most recent report to Congress on China’s military states: “In 2018, DoD’s plan for military-to-military
contacts with China focused on three interconnected priorities: (1) encouraging China to act in ways consistent with the
free and open international order; (2) promoting risk reduction and risk management efforts that diminish the potential
for misunderstanding or miscalculation; and (3) deconflicting forces operating in close proximity. U.S. Department of
Defense, Annual Report to Congress: Military and Security Developments Involving the People’s Republic of China
2019, May 2, 2019, p. 107.
70 Ryan Browne, “US Navy has had 18 Unsafe or Unprofessional Encounters with China Since 2016,” CNN,
November 3, 2018, https://www.cnn.com/2018/11/03/politics/navy-unsafe-encounters-china/index.html.
71 U.S. Department of Defense, “Remarks by Secretary Mattis at Plenary Session of the 2018 Shangri-La Dialogue,”
June 2, 2018, https://dod.defense.gov/News/Transcripts/Transcript-View/Article/1538599/remarks-by-secretary-mattisat-plenary-session-of-the-2018-shangri-la-dialogue/.
72 U.S. Department of the Treasury, “CAATSA—Russia-Related Designations,” September 20, 2018,
https://www.treasury.gov/resource-center/sanctions/OFAC-Enforcement/Pages/20180920_33.aspx.
73 U.S. Defense Security Cooperation Agency, “Taipei Economic and Cultural Representative Office in the United
States (TECRO)–Foreign Military Sales Order (FMSO) II Case,” Transmittal No. 18-09, September 24, 2018,
http://www.dsca.mil/major-arms-sales/taipei-economic-and-cultural-representative-office-united-states-tecro-foreign;
Robert Burns, “China Denies Request for a Hong Kong Port Call by USS Wasp,” Associated Press, September 25,
2018, https://www.military.com/daily-news/2018/09/25/china-denies-request-hong-kong-port-call-uss-wasp.html; Jane
Perlez, “China Cancels High-level Security Talks with the U.S.” New York Times, September 30, 2018,
https://www.nytimes.com/2018/09/30/world/asia/china-us-security-mattis.html.
74 The two men met in Beijing in June 2018, in Singapore in October, 2018, and in Washington, DC, for the second
meeting of the D&SD in November 2018.
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relationship could be a stabilizing factor for the overall bilateral relationship, and committed to a
productive mil-mil relationship.”75 In May 2019 remarks, Assistant Secretary of Defense for
Indo-Pacific Security Affairs Randall Schriver echoed this sentiment, saying, “We continue to
pursue a constructive result-oriented [military-to-military] relationship between our countries.”76
Table 4. Select Security and Military Dialogues, 2009-Present
Years
Convened
Dialogue Name
Rank/Level of Current Cochairs
Notes
Diplomatic and Security
Dialogue (est. 2017)
Secretaries of State and Defense | CPC
Politburo Member responsible for
foreign affairs
2017, 2018
PRC Minister of
Defense attended
2018 meeting, but
the PRC has not
designated him a
cochair
Defense Consultative Talks
(est. 1997)
Undersecretary of Defense for Policy |
PRC cochair position vacant
2009-2014
In hiatus since
2014
Asia-Pacific Security
Dialogue
(est. 2015)
Assistant Secretary of Defense for IndoPacific Security Affairs | Director, CPC
Central Military Commission Office of
International Military Cooperation
2015, 2017, 2019
Forum for
discussion of
regional security
issues
Defense Policy Coordination
Talks (est. 2006)
Deputy Assistant Secretary of Defense
for Asian and Pacific Security Affairs |
Deputy Director, CPC Central Military
Commission Office of International
Military Cooperation
2009-2018
(planned for
2019)
Sets annual
agenda for
military
exchanges
Maritime Military
Consultative Agreement
Talks
(est. 1998)
Various
2009-2018
(planned for
2019)
Forum for
discussion of
concerns about
air and maritime
operational safety
Joint Staff Dialogue
Mechanism
(est. 2017)
Director of Joint Staff J5 | Deputy Chief
of Central Military Commission Joint
Staff Department
2017 (planned for
then suspended
in 2018; planned
for 2019)
Dialogue to
reduce risks from
miscalculations
Source: U.S. Department of Defense, U.S. Department of State.
Notes: The PRC established the Central Military Commission Office of International Military Cooperation in
2016; its predecessor organization was the Ministry of National Defense Foreign Affairs Office.
U.S. Foreign Assistance in China
Since 2001, U.S. assistance efforts in China have aimed to support human rights, democracy, rule
of law, and environmental programs and to promote sustainable development and environmental
conservation and preserve indigenous culture in Tibetan areas in China. The U.S. government
75 U.S. Department of State, “U.S.-China Diplomatic and Security Dialogue,” November 9, 2018,
https://www.state.gov/u-s-china-diplomatic-and-security-dialogue-3/.
76 U.S. Department of Defense, “Assistant Secretary of Defense for Indo-Pacific Security Affairs Schriver Press
Briefing on the 2019 Report on Military and Security Developments in China,” May 3, 2019, https://dod.defense.gov/
News/Transcripts/Transcript-View/Article/1837011/assistant-secretary-of-defense-for-indo-pacific-security-affairsschriver-press/source/GovDelivery/.
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does not provide assistance to PRC government entities or directly to Chinese NGOs. The direct
recipients of Department of State and U.S. Agency for International Development (USAID)
grants have been predominantly U.S.-based nongovernmental organizations (NGOs) and
universities.77
Between 2001 and 2018, the U.S. government provided approximately $241 million for programs
in China administered by the Department of State’s Bureau of Democracy, Human Rights, and
Labor (DRL); $99 million for Tibetan programs; $72 million for rule of law and environmental
efforts in the PRC; $43 million for health programs in China focused upon HIV/AIDS prevention,
care, and treatment and countering the spread of pandemic diseases; and $8.0 million for criminal
justice reform.78 DRL programs across China have supported rule of law development, civil
society, government transparency, public participation in government, and internet freedom. Since
1993, Peace Corps volunteers have engaged in environmental awareness programs and teaching
English as a second language in China.79 Since 2015, Congress has appropriated funds for Tibetan
communities in India and Nepal ($6 million in FY2019). Since 2018, Congress has provided an
additional $3 million annually to strengthen institutions and governance in the Tibetan exile
communities. (See Table 5.)
Table 5. U.S. Foreign Assistance Programs in China (Department of State and
USAID), FY2013-FY2018
(Constant $US thousands)
Account (Program)
2013
2014
2015
2016
2017
2018 est.
Economic Support Fund
and Democracy Fund
(administered by StateDRL)
10,000
10,000
13,000
12,000
11,000
10,000
Economic Support Fund
(Tibetan Areas—
administered by USAID)
7,032
7,000
7,900
8,000
8,000
8,000
Economic Support Fund
(rule of law,
environment—
administered by USAID)
3,092
3,000
3,500
5,000
5,000
5,000
Global Health Programs
(USAID)
2,977
1,500
0
1,500
1,500
0
International Narcotics
Control and Law
Enforcement (criminal
justice—administered by
State-INL)a
823
800
825
800
800
2,000
Totals
23,924
22,300
25,225
27,300
26,300
25,000
Peace Corps
3,200
2,500
4,100
4,200
4,200
4,100
77 For further information, see CRS Report RS22663, U.S. Assistance Programs in China, by Thomas Lum.
78 Criminal Justice programs are administered by the Department of State’s Bureau of International Narcotics and Law
Enforcement Affairs (INL).
79 Peace Corps, “Peace Corps in China,” https://www.peacecorps.gov/china/.
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Source: U.S. Department of State.
a. INL—Bureau of International Narcotics and Law Enforcement Affairs.
The Consolidated Appropriations Act, 2019 (P.L. 116-6) appropriated an estimated $25.8 million
for programs in China. This total includes ESF funding of $17 million for programs in China
(non-Tibetan areas), ESF of $8 million for Tibetan areas in China, and INCLE funding of
$800,000 for rule of law programs. Of the ESF appropriation for non-Tibetan areas, DRL
administers human rights and democracy programs amounting to $11 million. In addition, P.L.
116-6 provided $17.5 million for Global Internet Freedom efforts, of which China programs are a
major recipient.
The FY2020 Department of State foreign operations budget justification does not include a
funding request for programs in China. Appropriations for such programs are determined largely
by congressional foreign operations appropriations legislation.
Select Issues in the Bilateral Relationship
Economic Issues
Section 301 Investigation and Tariffs
In March 2018, the USTR released the findings of an investigation into PRC policies related to
technology transfer, IP, and innovation under Sections 301-308 of the Trade Act of 1974 (19
U.S.C. 2411-2418).80 The investigation concluded that four IP rights-related PRC policies
justified U.S. action: forced technology transfer requirements; cyber-enabled theft of U.S. IP and
trade secrets; discriminatory and nonmarket licensing practices; and state-funded strategic
acquisition of U.S. assets. Subsequently, the Trump Administration imposed increased 25% tariffs
on three tranches of imports from China worth approximately $250 billion (see Table 6). China in
turn raised tariffs (at rates ranging from 5% to 25%) on approximately $110 billion worth of U.S.
products.
After negotiations to resolve the standoff broke down in May 2019, the President ordered the
USTR to begin the process of levying increased 25% tariffs on nearly all remaining imports from
China.81 Following a 12th round of talks between U.S. and Chinese trade negotiators in Shanghai
at the end of July 2019, the President on August 1, 2019, announced that the United States would
impose additional 10% tariffs on these remaining imports beginning September 1, 2019.82 On
August 13, 2019, the Trump Administration announced that some imports from China previously
identified as potentially subject to the additional 10% tariffs would be exempted “based on health,
safety, national security and other factors,” and that for some other imports from China, including
80 The White House, “Presidential Memorandum on the Actions by the United States Related to the Section 301
Investigation,” March 22, 2018. For more detail, see CRS Insight IN10943, Escalating U.S. Tariffs: Timeline,
coordinated by Brock R. Williams; CRS Insight IN10971, Escalating U.S. Tariffs: Affected Trade, coordinated by
Brock R. Williams; and CRS Insight IN11135, U.S. Trade Friction with China Intensifies, by Wayne M. Morrison.
81 Office of the U.S. Trade Representative, “Notice of Modification of Section 301 Action: China’s Acts, Policies, and
Practices Related to Technology Transfer, Intellectual Property, and Innovation,” 84 Federal Register 20459, May 9,
2019, https://www.federalregister.gov/documents/2019/05/09/2019-09681/notice-of-modification-of-section-301action-chinas-acts-policies-and-practices-related-to.
82 Donald J. Trump on Twitter, August 1, 2019, https://twitter.com/realdonaldtrump/status/1156979446877962243.
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cell phones, laptop computers, video game consoles, computer monitors, and some toys and
footwear and clothing items, the additional 10% tariffs would be delayed until December 15.83
China responded to the President’s August 1, 2019, announcement by allowing its currency, the
renminbi or RMB, to weaken against the U.S. dollar, making Chinese exports more competitive
abroad, and in part “offsetting” the impact of U.S. tariffs. Chinese companies also suspended new
purchases of U.S. agricultural products.84 On August 23, 2019, China’s Ministry of Finance
announced plans to impose retaliatory tariffs of 5% to 10% on $75 billion worth of imports from
the United States. Tariffs on some products took effect on September 1, 2019; tariffs on the rest
are to go into effect on December 15, 2019.85 The Ministry also announced restoration of 5%25% tariffs on U.S. autos and auto parts, to go into effect December 15, 2019.86
President Trump responded, in turn, to China’s tariff announcements by stating that he would
increase the tariff rate for $250 billion worth of imports from China from 25% to 30%, effective
October 1, 2019, and that he would increase the proposed tariff rate for the remaining imports
from China from 10% to 15%, to go into effect for some products on September 1, 2019, and for
other products on December 15, 2019.87
Trade negotiators from the two sides are scheduled to meet for a 13th round of negotiations in
Washington, DC, in September 2019.
Table 6. U.S. Section 301 Tariff Actions
Date U.S. Tariffs
Imposed
07/06/2018,
10/01/2019
(proposed)
Tariff Rates
(ad valorem)
25%, proposed to
rise to 30%
Stated Value of
Imports
Affected
$34 billion
China’s Reaction
25% tariffs on $34 billion of U.S. goods
(effective 7/06/2018)
83 Office of the U.S. Trade Representative, “USTR Announces Next Steps on Proposed 10 Percent Tariff on Imports
from China,” August 13, 2019, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2019/august/ustrannounces-next-steps-proposed; Office of the U.S. Trade Representative, “Notice of Modification of Section 301
Action: China's Acts, Policies, and Practices Related to Technology Transfer, Intellectual Property, and Innovation,” 84
Federal Register 43304, August 20, 2019, https://www.federalregister.gov/documents/2019/08/20/2019-17865/noticeof-modification-of-section-301-action-chinas-acts-policies-and-practices-related-to.
84 Ministry of Commerce of the PRC, “中国相关企业暂停新的美国农产品采购” (“Relevant Chinese Enterprises
Suspending New Purchases of U.S. Agricultural Products”) (CRS translation), August 6, 2019,
http://www.mofcom.gov.cn/article/ae/ag/201908/20190802887951.shtml; Hallie Gu and Tom Daly, “U.S. Farmers
Suffer ‘Body Blow’ as China Slams Door on Farm Purchases,” Reuters, August 5, 2019.
85 Ministry of Finance of the PRC, “国务院关税税则委员会关于对原产于美国的部分进口商品 (第三批）加征关
税的公告” (“Customs Tariff Commission of the State Council Notice on Increased Tariffs for Some Products of U.S.
Origin (Third Tranche”) (CRS translation), August 23, 2019, http://gss.mof.gov.cn/zhengwuxinxi/zhengcefabu/201908/
t20190823_3372928.html.
86 Ministry of Finance of the PRC, “国务院关税税则委员会关于对原产于美国的汽车及零部件恢复加征关税的公
告” (“Customs Tariff Commission of the State Council Notice on Restoration of Tariffs on U.S.-Manufactured Autos
and Parts”), August 23, 2019, http://gss.mof.gov.cn/zhengwuxinxi/zhengcefabu/201908/t20190823_3372941.html.
87 Donald J. Trump on Twitter, August 23, 2019, https://twitter.com/realdonaldtrump/status/1165005929831702529;
Office of the United States Trade Representative, “Request for Comments Concerning Proposed Modification of
Action Pursuant to Section 301: China’s Acts, Policies, and Practices Related to Technology Transfer, Intellectual
Property, and Innovation,” 84 Federal Register 46212, September 3, 2019, https://www.govinfo.gov/content/pkg/FR2019-09-03/pdf/2019-18946.pdf.
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Date U.S. Tariffs
Imposed
Tariff Rates
(ad valorem)
Stated Value of
Imports
Affected
China’s Reaction
08/23/2018,
10/01/2019
(proposed)
09/24/2018,
06/15/2019,
10/01/2019
(proposed)
25%, proposed to
rise to 30%
$16 billion
25% tariffs on $16 billion of U.S. goods
(effective 8/23/2018)
10%,
then 25%,
proposed to rise
to 30%
$200 billion
5%-10% tariff hikes on $60 billion worth of
imports from United States (effective
9/24/2018); then tariffs on some items raised to
up to 25% (effective 6/01/2019)
09/01/2019 (initial
tranche), 12/15/2019
second tranche)
(proposed)
15%
$300 billion
Allowed currency to depreciate; suspended
new purchases of U.S. agricultural goods;
announced 5%-10% tariffs on $75 billion of
imports from United States, (effective
9/01/2019 and 12/15/2019); announced
restoration of 5%-25% tariffs on U.S. autos and
auto parts, to go into effect 12/15/2019.
Source: CRS with data from USTR and China’s Ministry of Finance
Tariffs on Aluminum and Steel
In March 2018, President Trump issued a proclamation imposing a 10% tariff on aluminum and a
25% tariff on steel products from most countries, including China, based on “national security”
justifications under Section 232 of the Trade Act of 1962 (P.L. 87-794; 19 U.S.C. §1862).88 In
response, China raised tariffs by 15% to 25% on $3 billion worth of U.S. imports.89 China is also
pursuing legal action against the United States at the WTO.90 In turn, the United States filed its
own WTO complaints over China’s retaliatory tariffs.91
Alleged PRC Currency Manipulation
On August 5, the U.S. Treasury Department labeled China a currency manipulator under Section
3004 of the Omnibus Trade and Competitiveness Act of 1988 (P.L. 100-418) and announced that
Treasury Secretary Steven Mnuchin would “engage with the International Monetary Fund [IMF]
to eliminate the unfair competitive advantage created by China’s latest actions.”92 In its annual
review of China’s economic policies, released on August 9, 2019, however, the IMF stated,
88 Presidential Proclamation 9704 of March 8, 2018, “Adjusting Imports of Aluminum into the United States,” 83
Federal Register 11619, March 15, 2018, and Proclamation 9705 of March 8, 2018, “Adjusting Imports of Steel Into
the United States,” 83 Federal Register 11625, March 15, 2018. Australia, Argentina, Canada, and Mexico negotiated
exemptions from the tariffs. Brazil and South Korea gained exemptions from the steel tariffs but are still subject to
aluminum tariffs.
89 For more detail, see CRS Report R45249, Section 232 Investigations: Overview and Issues for Congress, coordinated
by Rachel F. Fefer.
90 World Trade Organization, “DS544: United States—Certain Measures on Steel and Aluminum Products,” January
25, 2019.
91 USTR, “United States Challenges Five WTO Members Imposing Illegal Tariffs Against U.S. Products,” press
release, July 2018, https://ustr.gov/about-us/policy-offices/press-office/press-releases/2018/july/united-stateschallenges-five-wto.
92 U.S. Department of the Treasury, “Treasury Designates China as a Currency Manipulator,” August 5, 2019,
https://home.treasury.gov/news/press-releases/sm751; CRS Insight IN11154, The Administration’s Designation of
China as a Currency Manipulator, by Rebecca M. Nelson.
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“[e]stimates suggest little FX [foreign exchange] intervention by” China’s central bank, the
People’s Bank of China.93
Bilateral Trade Deficit
President Trump has raised concerns about U.S. bilateral trade imbalances, particularly with
China.94 Some policymakers view the large U.S. trade deficit as an indicator of an unfair trade
relationship resulting from Chinese trade barriers, such as comparatively high tariffs, and
currency manipulation. Others view conventional bilateral trade deficit data as misleading, given
multinational firms’ growing use of global supply chains.95 Supporters of the latter view note that
products may be invented or developed in one country and manufactured or assembled
elsewhere—using imported components from multiple foreign sources—and then exported.
Conventional U.S. trade data may not fully reflect the value added in each country, and thus are
often a relatively poor indicator of who benefits from global trade.96 Economists generally agree
that the overall size of the trade deficit stems largely from U.S. macroeconomic policies and an
imbalance between saving and investment in the economy, rather than from foreign trade
barriers.97
Industrial Policies
The Trump Administration, some Members of Congress, and others charge that the Chinese
government employs policies, including subsidies, tax breaks, low-cost loans, trade and
investment barriers, discriminatory IP and technology practices, and technology transfer
mandates, to support and protect domestic firms, especially state-owned enterprises (SOEs).
Chinese government plans, such as “Made in China 2025,” appear to signal an expanded role for
the government in the economy, which many analysts fear could distort global markets and hurt
the global competitiveness of U.S. firms.98 Separately, some U.S. officials are concerned that
participation by Chinese firms in certain global supply chains, such as information and
93 International Monetary Fund, “People’s Republic of China: 2019 Article IV Consultation-Press Release; Staff
Report; Staff Statement and Statement by the Executive Director for China,” Country Report No. 19/266, August 9,
2019.
94 Office of the U.S. Trade Representative, “U.S. Trade Representative and the U.S. Department of Treasury respond to
the ‘White Paper’ issued by China on June 2, 2019,” press release, June 3, 2019, https://ustr.gov/about-us/policyoffices/press-office/press-releases/2019/june/us-trade-representative-and-us.
95 For more detail, see CRS In Focus IF10619, The U.S. Trade Deficit: An Overview, by James K. Jackson; CRS Report
R45243, Trade Deficits and U.S. Trade Policy, by James K. Jackson; and CRS Report RL33274, Financing the U.S.
Trade Deficit, by James K. Jackson.
96 For a discussion on the limitations of trade data, see CRS Report R45434, U.S. Trade with Major Trading Partners,
by Andres B. Schwarzenberg.
97 James McBride and Andrew Chatzky, “The U.S. Trade Deficit: How Much Does It Matter?” Backgrounder, Council
on Foreign Relations, March 8, 2019, https://www.cfr.org/backgrounder/us-trade-deficit-how-much-does-it-matter;
Congressional Budget Office, “Causes and Consequences of the Trade Deficit: An Overview,” CBO Memorandum,
March 2000, https://www.cbo.gov/sites/default/files/106th-congress-1999-2000/reports/tradedef.pdf; and CRS Report
R45243, Trade Deficits and U.S. Trade Policy, by James K. Jackson.
98 See U.S. Chamber of Commerce, Made in China 2025: Global Ambitions Built on Local Protections, March 5, 2017,
https://www.uschamber.com/sites/default/files/final_made_in_china_2025_report_full.pdf; CRS In Focus IF10964, The
Made in China 2025 Initiative: Economic Implications for the United States, by Wayne M. Morrison; and “Made In
China 2025: The Domestic Tech Plan That Sparked an International Backlash,” SupChina, June 28, 2018,
https://supchina.com/2018/06/28/made-in-china-2025/.
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communications technology (ICT) products and services, could pose risks to U.S. national
security, primarily because of PRC firms’ relationships with the Chinese state.
Intellectual Property Rights (IPR) and Cyber-Theft
As noted in the Section 301 investigation, the Trump Administration considers Chinese IPR
violations to be a major source of U.S. economic losses. U.S. firms cite lax IPR enforcement as
one of the biggest challenges to doing business in China, and some view the enforcement
shortfalls as a deliberate effort by the Chinese government to give domestic firms an advantage
over foreign competitors. In 2018, the U.S. National Counterintelligence and Security Center
described China as having “expansive efforts in place to acquire U.S. technology to include
sensitive trade secrets and proprietary information.” It warned that if the threat is not addressed,
“it could erode America’s long-term competitive economic advantage.”99
The U.S. government’s first charges against a state actor for cyber-enabled economic espionage
were against China. In May 2014, the Obama Administration Justice Department indicted five
PRC military officers for hacking into and stealing secrets from U.S. firms in the nuclear power,
metals, and solar products industries.100 All those indicted remain at large. In September 2015, the
Obama Administration and China reached a bilateral agreement on cybersecurity during President
Xi’s state visit to the United States. Under that agreement, Presidents Xi and Obama pledged that
neither country’s government would conduct or knowingly support cyber-enabled theft of
intellectual property for commercial purposes.101 In February 2018 testimony to Congress, the
U.S. intelligence community assessed that PRC cyber activity continued, but at “volumes
significantly lower than before” the 2015 agreement.102 In October 2018, however, the cofounder
of cybersecurity firm CrowdStrike asserted that after a lull, China was “back to stealing
intellectual property on a massive scale.”103 In 2019, the intelligence community’s testimony to
Congress stated, “China remains the most active strategic competitor responsible for cyber
espionage against the US Government, corporations, and allies.”104
Advanced Technology and Huawei105
The Trump Administration has raised national security concerns over global supply chains of
advanced technology products, such as ICT equipment, where China is a major global producer
99 U.S. National Counterintelligence and Security Center, Foreign Economic Espionage in Cyberspace, 2018, July 26,
2018, https://www.dni.gov/files/NCSC/documents/news/20180724-economic-espionage-pub.pdf.
100 U.S. Department of Justice, “U.S. Charges Five Chinese Military Hackers for Cyber Espionage Against U.S.
Corporations and a Labor Organization for Commercial Advantage,” May 19, 2014, https://www.justice.gov/opa/pr/uscharges-five-chinese-military-hackers-cyber-espionage-against-us-corporations-and-labor. United States District Court
Western District of Pennsylvania, United States of America v. Wang Dong, Sun Kailiang, Wen Xinyu, Huang Zhenyu,
and Gu Chunhui, May 1, 2014.
101 White House, “Fact Sheet: President Xi Jinping’s State Visit to the United States,” September 25, 2015.
102 Testimony of Director of National Intelligence Daniel R. Coats, “Worldwide Threat Assessment of the U.S.
Intelligence Community,” before Senate Select Committee on Intelligence, February 13, 2018, https://www.dni.gov/
files/documents/Newsroom/Testimonies/2018-ATA—Unclassified-SSCI.pdf.
103 Ken Dilanian, “China’s Hackers are Stealing Secrets from U.S. Firms Again, Experts Say,” NBC News, October 9,
2018, https://www.nbcnews.com/news/china/china-s-hackers-are-stealing-secrets-u-s-firms-again-n917836.
104 Testimony of Director of National Intelligence Daniel R. Coats, “Worldwide Threat Assessment of the U.S.
Intelligence Community,” before U.S. Congress, Senate Select Committee on Intelligence, January 29, 2019,
https://www.dni.gov/files/ODNI/documents/2019-ATA-SFR—SSCI.pdf.
105 For more on Huawei, see CRS Report R45485, Fifth-Generation (5G) Telecommunications Technologies: Issues for
Congress, by Jill C. Gallagher and Michael E. DeVine, and CRS In Focus IF11251, National Security Implications of
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and supplier. In 2017, the President blocked a proposed Chinese acquisition of a U.S.
semiconductor firm on national security grounds.106 On May 15, 2019, citing a “national
emergency,” President Trump signed Executive Order 13873, authorizing the Secretary of
Commerce to ban certain technology transactions involving “foreign adversaries.”107
The Trump Administration has subjected Chinese telecommunications firm Huawei Technologies
Co., Ltd. to particular scrutiny. On May 16, 2019, the U.S. Department of Commerce added
Huawei and 68 of its non-U.S. affiliates to the Bureau of Industry and Security’s (BIS’s) Entity
List, generally requiring U.S. companies to apply for an export license for the sale or transfer of
U.S. technology to those entities, with a “presumption of denial” for such applications. The BIS
entity list decision cites “reasonable cause to believe Huawei has been involved in activities
contrary to the national security or foreign policy interests of the United States,” and notes
Huawei’s indictment in the U.S. District Court for the Eastern District of New York on charges of
violating Iran sanctions.108 On May 20, 2019, BIS eased the effect of the entity list decision by
issuing a three-month temporary general license authorizing some continued transactions with
Huawei and its non-U.S. affiliates.109 On August 19, 2019, BIS added an additional 46 non-U.S.
Huawei affiliates to the entity list, while also extending the temporary general license for another
three months, to November 18, 2019.110
In apparent response to U.S. actions, China’s Ministry of Commerce in June 2019 announced
plans for its own “unreliable entities list,” to include foreign entities that damage “the legitimate
rights and interests” of Chinese firms or “boycott or cut off supplies to Chinese companies for
non-commercial reasons.”111
Vice President Pence and U.S. Secretary of State Pompeo have repeatedly urged allies not to
work with Huawei. In Ottawa, Canada, in May 2019, Pence argued, “The simple fact is that the
legal framework within China gives the Chinese government access to information and data that
is collected by Chinese companies like Huawei,” making Huawei “incompatible with the security
interests of the United States of America or our allies in freedom-loving nations across the
Fifth Generation (5G) Mobile Technologies, by John R. Hoehn and Kelley M. Sayler.
106 U.S. Department of the Treasury, “Statement on The President’s Decision Regarding Lattice Semiconductor
Corporation,” Press Center, September 13, 2017.
107 The White House, “Executive Order on Securing the Information and Communications Technology and Services
Supply Chain,” May 15, 2019, https://www.whitehouse.gov/presidential-actions/executive-order-securing-informationcommunications-technology-services-supply-chain/.
108 U.S. Department of Commerce, Bureau of Industry and Security, “Addition of Entities to the Entity List,” 84
Federal Register 22961, May 21, 2019, https://www.federalregister.gov/documents/2019/05/21/2019-10616/additionof-entities-to-the-entity-list.
109 U.S. Department of Commerce, Bureau of Industry and Security, “Temporary General License,” 84 Federal
Register 23468, May 22, 2019, https://www.federalregister.gov/documents/2019/05/22/2019-10829/temporary-generallicense.
110 U.S. Department of Commerce, Bureau of Industry and Security, “Addition of Certain Entities to the Entity List and
Revision of Entries on the Entity List,” 84 Federal Register 43493, August 19, 2019, https://www.federalregister.gov/
documents/2019/08/21/2019-17921/addition-of-certain-entities-to-the-entity-list-and-revision-of-entries-on-the-entitylist; U.S. Department of Commerce, Bureau of Industry and Security, “Temporary General License: Extension of
Validity, Clarifications to Authorized Transactions, and Changes to Certification Statement Requirements, effective
August 19, 2019,” 84 Federal Register 43487, August 21, 2019, https://www.federalregister.gov/documents/2019/08/
21/2019-17920/temporary-general-license-extension-of-validity-clarifications-to-authorized-transactions-and.
111 Ministry of Commerce of the PRC, “MOFCOM Spokesman Meets the Press on China’s Introduction of ‘Unreliable
Entities List’ Regime,” June 1, 2019, http://english.mofcom.gov.cn/article/newsrelease/press/201906/
20190602873151.shtml.
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world.”112 Pompeo warned European allies, partners, and friends in June 2019, “don’t do anything
that would endanger our shared security interests or restrict our ability to share sensitive
information.”113 Of U.S. allies, only Australia has so far barred Huawei completely from its
networks. China’s Foreign Ministry accuses the United States of seeking to “strangle [Chinese
companies’] lawful and legitimate operations.”114
The Huawei issue has spilled into U.S.-Canada and Canada-China relations. In 2018, the United
States requested that Canada detain top Huawei executive Meng Wanzhou, a daughter of
Huawei’s founder, and charged her with financial fraud related to alleged violation of Iran
sanctions. She faces possible extradition to the United States. China has retaliated against Canada
by detaining and later arresting Canadians Michael Kovrig and Michael Spavor on state secrets
charges and cutting off imports first of Canadian canola seed, and then of Canadian meat.115
China’s Status as a “Developing Country” in the WTO
The 164-member WTO allows members to designate themselves as either developed or
developing economies, with the latter eligible for special and differential treatment (SDT) both in
the context of existing WTO obligations and in new negotiations. Developed countries, including
the United States and the European Union, have expressed frustration at those rules, under which
two-thirds of WTO members, including China, have designated themselves as “developing.”
On July 26, 2019, President Trump issued a “Memorandum on Reforming Developing-Country
Status in the World Trade Organization.”116 The President stated that the WTO dichotomy
between developed and developing countries is outdated and “has allowed some WTO Members
to gain unfair advantages in the international trade arena.” He specifically called out China,
stating that “the United States has never accepted China’s claim to developing-country status, and
virtually every current economic indicator belies China’s claim.” The President instructed USTR
to work to reform the WTO self-declaration practice and, if no substantial progress is made
within 90 days, to take certain unilateral actions, such as no longer treating a country as
developing if the USTR believes that designation to be improper, and to publish a list of all
economies USTR believes to be “inappropriately” claiming developing-economy status.
Responding to the U.S. memorandum, a PRC Foreign Ministry spokesperson insisted that the
principle of SDT “reflects the core values and basic principles of the WTO” and “must be
safeguarded no matter how the WTO is reformed.” At the same time, she stated that in claiming
the status, “China does not intend to shy away from its due international responsibilities.” The
U.S. position, she said, shows the United States to be “capricious, arrogant and selfish.”117
112 The White House, “Remarks by Vice President Pence and Prime Minister Trudeau of Canada in Joint Press
Statements | Ottawa, Canada,” May 30, 2019, https://www.whitehouse.gov/briefings-statements/remarks-vicepresident-pence-prime-minister-trudeau-canada-joint-press-statements-ottawa-canada/.
113 U.S. Department of State, “Secretary of State Michael R. Pompeo and Dutch Foreign Minister Stef Blok at a Press
Availability,” June 3, 2019, https://www.state.gov/secretary-of-state-michael-r-pompeo-and-dutch-foreign-ministerstef-blok-at-a-press-availability/.
114 Ministry of Foreign Affairs of the PRC, “Foreign Ministry Spokesperson Geng Shuang’s Remarks on the U.S.
Indictments of Huawei,” January 29, 2019.
115 Maham Abedi, “Canada-China Tension: Why They Began and What’s Happened Since,” Globe News (Canada),
June 27, 2019, https://globalnews.ca/news/5433842/canada-china-detentions-trade-extradition/.
116 The White House, “Memorandum on Reforming Developing-Country Status in the World Trade Organization,” July
26, 2019, https://www.whitehouse.gov/presidential-actions/memorandum-reforming-developing-country-status-worldtrade-organization/.
117 Ministry of Foreign Affairs of the PRC, “Foreign Ministry Spokesperson Hua Chunying’s Regular Press
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China’s Belt and Road Initiative (BRI)
In 2013, President Xi launched two projects aimed at boosting economic connectivity across
continents by land, an effort known as the “Silk Road Economic Belt,” and by sea, an effort
known as the, “21st Century Maritime Silk Road.” Collectively, China refers to the two projects as
the “Belt and Road Initiative” (BRI). Under the initiative, PRC institutions are financing
transportation and energy infrastructure projects in dozens of countries and PRC government
agencies are working to reduce investment and trade barriers and boost people-to-people ties. BRI
is also intended to alleviate overcapacity in the Chinese economy, bring new economic activity to
China’s western provinces, and promote PRC diplomatic and security interests, including
securing energy supply routes and perhaps facilitating future Chinese military or intelligence use
of Chinese-built ports and other infrastructure around the world.118 The size and scale of PRC
financing, investments, and loans issued under BRI is debated. China does not issue its own
authoritative figures.
PRC financing has the potential to address serious infrastructure shortfalls in recipient countries,
but China’s initial implementation of BRI has sometimes been rocky. A June 2019 Asia Society
Policy Institute report examines BRI projects in Southeast Asia and faults China for a “laissezfaire approach” that allows mainly Chinese developers “to benefit by cutting corners and evading
responsibility for legal, social, labor, environmental, and other issues.” The report identifies such
problems as rushed agreements, a failure to conduct feasibility studies and environmental and
social impact assessments, and financing terms that create unsustainable debt for host
governments. All those issues “have begun to alienate local communities and taint the BRI
brand,” the report asserts.119 Some countries have sought to renegotiate the terms of their BRI
agreements.
The Trump Administration has adopted a sharply critical stance toward BRI. In his October 4,
2018, speech on China policy, Vice President Pence accused China of engaging in “so-called
‘debt diplomacy.’” The terms of PRC loans, he said, “are opaque at best, and the benefits flow
overwhelmingly to Beijing.”120 In Congress, the Better Utilization of Investments Leading to
Development (BUILD) Act of 2018 (P.L. 115-254) established a new U.S. International
Development Finance Corporation (IDFC) by consolidating existing U.S. government
development finance functions. It is widely portrayed as a U.S. response to BRI.121
At the Second Belt and Road Forum in Beijing in April 2019, Xi appeared to respond to criticism
from the United States and other countries when he referenced the “need to ensure the
commercial and fiscal sustainability of all projects so that they will achieve the intended goals as
planned.” He declared that in pursuing BRI, “everything should be done in a transparent way, and
we should have zero tolerance for corruption.” He also vowed to “adopt widely accepted
Conference,” July 29, 2019, https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/
t1684227.shtml.
118 U.S. Department of Defense (DOD), “Assessment on U.S. Defense Implications of China’s Expanding Global
Access,” report to Congress mandated by Section 1259b of the National Defense Authorization Act for FY2018 (P.L.
115-91), January 14, 2019, https://media.defense.gov/2019/Jan/14/2002079292/-1/-1/1/EXPANDING-GLOBALACCESS-REPORT-FINAL.PDF.
119 Daniel R. Russel and Blake Berger, “Navigating the Belt and Road Initiative,” Asia Society Policy Institute, June
2019, https://asiasociety.org/policy-institute/belt-and-road-initiative.
120 The White House, “Remarks by Vice President Pence on the Administration’s Policy Toward China,” October 4,
2018.
121 CRS Report R45461, BUILD Act: Frequently Asked Questions About the New U.S. International Development
Finance Corporation, by Shayerah Ilias Akhtar and Marian L. Lawson.
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standards and encourage participating companies to follow general international rules and
standards in project development, operation, procurement and tendering and bidding.”122
Security Issues
PRC Military Modernization
U.S. policymakers are concerned about the challenges that China’s ambitious military
modernization program is now posing to U.S. interests in Asia and elsewhere. China’s military
modernization program has emerged in recent years as a significant influence on U.S. defense
strategy, plans, budgets, and programs, and the U.S.-China military competition has become a
major factor in overall U.S.-China relations. Since 1978, the PRC has worked to transform the
PLA from an infantry-heavy, low-technology, ground forces-centric military into a hightechnology, networked force with an increasing emphasis on joint operations, maritime and
information domains, offensive air operations, power projection, and cyber and space operations.
The PLA is becoming a global military, as demonstrated by a navy increasingly capable of
operating far from home. The PLA undertakes counterpiracy patrols in the Gulf of Aden, regular
patrols in places like the South China Sea and the Indian Ocean, and task group and goodwill
deployments all over the world, and in 2017 established China’s first-ever overseas military base
in Djibouti.123
President Xi has set two major deadlines for the PLA: to complete its modernization process by
2035, and to become a “world class” military by 2049, the centenary of the establishment of the
PRC.124 According to China’s July 2019 defense white paper, China seeks to build “a fortified
national defense and a strong military commensurate with the country’s international standing
and its security and development interests” in service of several national defense aims.125
According to DOD, the PLA is seeking to develop “capabilities with the potential to degrade core
U.S. operational and technological advantages.”126 As China’s military advances, it increasingly
is in a position to challenge U.S. dominance in certain domains, including air, space, and
cyberspace, where the PLA has directed significant political, organizational, and financial
resources in recent years. China also is investing heavily in advanced military technologies such
122 “Xi’s Keynote Speech at the Opening Ceremony of the Second Belt and Road Forum for International
Cooperation,” Xinhua, April 26, 2019, https://eng.yidaiyilu.gov.cn/home/rolling/88233.htm.
123 U.S. Department of Defense, Annual Report to Congress: Military and Security Developments Involving the
People’s Republic of China 2018, May 16, 2018, pp. 66-67.
124 According to DOD, “[S]ome observers have interpreted [the “world-class” goal] as meaning developing capabilities
on par with other global militaries, especially the United States.” U.S. Department of Defense, Annual Report to
Congress: Military and Security Developments Involving the People’s Republic of China 2019, May 2, 2019, p. 14.
125 These aims are: “(1) to deter and resist aggression; (2) to safeguard national political security, the people’s security,
and social stability; (3) to oppose and contain ‘Taiwan independence’; (4) to crack down on opponents of separatist
movements such as ‘Tibet independence’ and the creation of ‘East Turkestan’; (5) to safeguard national sovereignty,
unity, territorial integrity and security; (6) to safeguard China’s maritime rights and interests; (7) to safeguard China’s
security interests in outer space, electromagnetic space and cyberspace; (8) to safeguard China’s overseas interests; and
(9) to support the sustainable development of the country.” PRC State Council Information Office, China’s National
Defense in the New Era, July 2019, http://english.scio.gov.cn/2019-07/24/content_75026800_3.htm.
126 U.S. Department of Defense, Annual Report to Congress: Military and Security Developments Involving the
People’s Republic of China 2019, May 2, 2019, p. iii.
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as autonomous and unmanned systems, maneuverable reentry vehicles (including hypersonic
missiles), and artificial intelligence and other enabling technologies.127
Chinese officials insist China’s military posture is defensive in nature. In January 2018, a
spokesperson for China’s Ministry of National Defense stated, “China resolutely follows the path
of peaceful development and upholds a defensive national defense policy.” The spokesperson
added, “China is not interested in dominance.”128
North Korea
The United States and China have both committed to the goal of denuclearization of North Korea,
but have sometimes disagreed on the best path toward that goal. Between 2006 and 2017, China
voted for U.N. Security Council Resolutions imposing ever stricter sanctions on North Korea
over its nuclear weapons and missile programs, though it often sought to weaken the resolutions
first. With China sharing a 880-mile border and serving as North Korea’s primary trading partner,
the Trump Administration deems China’s sanctions implementation to be “at times inconsistent,
but critical.”129
The Treasury Department has designated mainland China-based companies, Hong Kong-based
shipping companies, and PRC nationals for alleged violations of U.S. North Korea sanctions.130
In both 2018 and 2019, the United States led efforts to request that a U.N. sanctions committee
declare that North Korea had procured refined petroleum products at levels greater than U.N.
sanctions permit, and to halt all new deliveries. Both times, China and Russia are reported to have
blocked the effort. North Korea is alleged to have obtained the above-quota petroleum products
through illegal ship-to-ship transfers at sea.131
The announcement of President Trump’s June 2018 summit with North Korean leader Kim Jongun led to a thaw in previously frosty China-North Korea ties. Since March 2018, Kim has visited
China four times and President Xi has visited North Korea once, in June 2019. China urges all
parties to undertake “phased and synchronized steps” in a “dual-track approach” to a political
settlement of issues on the Korean Peninsula, with one track focused on denuclearization and the
other on establishing a peace mechanism.132
127 Tate Nurkin, et al., China’s Advanced Weapons Systems, Jane’s by IHS Markit, May 12, 2018.
128 Li Jiayao, “Military Rebuts U.S. Report Calling China a Threat,” China Daily, January 22, 2018.
129 U.S. Department of State, Report to Congress on Strategy to Address the Threats Posed by, and the Capabilities of,
the Democratic Republic of Korea, April 2019.
130 U.S. Department of the Treasury, Specially Designated Nationals and Blocked Persons List (SDN) Human Readable
Lists, https://www.treasury.gov/resource-center/sanctions/SDN-List/Pages/default.aspx.
131 Edith M. Lederer, “Russia, China Block UN from Saying Nkorea Violated Sanctions,” Associated Press, June 19,
2019, https://www.apnews.com/cb6be1337d2a48ecbde14dac590be083. United States Mission to the United Nations,
“Remarks to Press by Secretary Pompeo and Ambassador Haley at the UN,” July 20, 2018, https://usun.usmission.gov/
remarks-to-press-by-secretary-pompeo-and-ambassador-haley-at-the-un/.
132 Ministry of Foreign Affairs of the PRC, “Adhering to the ‘Dual-Track Approach’: The Realization of
Denuclearization of the Korean Peninsula and the Establishment of Peaceful Mechanism on the Korean Peninsula,”
April 5, 2018, https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1548991.shtml; Ministry of Foreign Affairs of the
PRC, “Wang Yi Talks About Promoting the Political Settlement Process of the Korean Peninsula Issue,” August 2,
2019, https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/t1686491.shtml.
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East China Sea133
In the East China Sea, the PRC is involved in a territorial dispute with Japan over the sovereignty
of uninhabited land features known in Japan as the Senkaku Islands and in the PRC as the Diaoyu
Dao. The features are also claimed by Taiwan, which refers to them as the Diaoyutai.134 The
United States does not take a position on the sovereignty dispute over the Senkakus, but it does
recognize Japanese administration of the features. That recognition, reaffirmed by every U.S.
Administration since Nixon, has given the United States a strong interest in the issue because
Article 5 of the U.S.-Japan Treaty of Mutual Cooperation and Security covers areas under
Japanese administration. The U.S. military regularly conducts freedom of navigation operations
(FONOPs) and presence operations, as well as combined exercises with the Japan Self-Defense
Force, in and above the East China Sea.
Since 2012, China has stepped up what it calls “routine” patrols to assert jurisdiction in China’s
“territorial waters off the Diaoyu Islands.”135 In November 2013, China established an air defense
identification zone (ADIZ) in the East China Sea covering the Senkakus as well as airspace that
overlaps with the existing ADIZs of Japan, South Korea, and Taiwan.136
South China Sea137
China makes extensive, though imprecise, claims in the South China Sea, which is believed to be
rich in oil and gas deposits as well as fisheries, and through which a major portion of world’s
trade passes. On maps, China depicts its claims with a “nine-dash line” that, if connected, would
enclose an area covering approximately 90% of the sea. China physically controls the Paracel
(known in China as the Xisha) Islands in the northern part of the sea, seven of the approximately
200 geographic features in the Spratly (Nansha) Islands chain in the southern part of the sea, and
Scarborough Shoal (Huangyan Island) in the eastern part of the sea (see Figure 3).138 Areas
claimed by the PRC are also claimed in part by Brunei, Malaysia, the Philippines, and Vietnam,
and in entirety by Taiwan, with the fiercest territorial disputes being those between China and
Vietnam and China and the Philippines. The South China Sea is bordered by a U.S. treaty ally, the
Philippines, and is a key strategic waterway for the U.S. Navy.
133 See CRS Report R42784, U.S.-China Strategic Competition in South and East China Seas: Background and Issues
for Congress, by Ronald O'Rourke.
134 China and Japan also dispute maritime rights in the East China Sea more broadly, with Japan arguing for a “median
line” equidistant from each country’s claimed territorial border dividing the two countries’ exclusive economic zones in
the East China Sea; China rejects Japan’s claimed median line, arguing it has maritime rights beyond this line. Japan
Ministry of Foreign Affairs, “Japan’s Legal Position on the Development of Natural in the East China Sea,” August 6,
2015, https://www.mofa.go.jp/a_o/c_m1/page3e_000358.html.
135 “China Coast Guard Vessels Patrol Diaoyu Islands,” Xinhua, January 15, 2018, http://www.xinhuanet.com/english/
2018-01/15/c_136896490.htm.
136 See CRS Report R43894, China's Air Defense Identification Zone (ADIZ), by Ian E. Rinehart and Bart Elias.
137 See CRS Report R42784, U.S.-China Strategic Competition in South and East China Seas: Background and Issues
for Congress, by Ronald O'Rourke.
138 The seven Spratly Islands reefs that China controls are Cuarteron Reef (known in China as Huayang Jiao), Fiery
Cross Reef (Yongshu Jiao), Gaven Reef (Nanxun Jiao), Hugh Reef (Dongmen Jiao), Johnson Reef (Chigua Jiao),
Mischief Reef (Meiji Jiao), and Subi Reef (Zhubi Jiao).
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Since 2013, the PRC has built and fortified
artificial islands on seven sites in the Spratly
Island chain, and sought to block other
countries from pursuing economic or other
activity within the exclusive economic zones
(EEZs) they are entitled to under the U.N.
Convention on the Law of the Sea
(UNCLOS). According to DOD, China has
placed anti-ship cruise missiles and longrange surface-to-air missiles on the artificial
islands and is “employing paramilitary forces
in maritime disputes vis-à-vis other
claimants.”139 In May 2018, the United States
disinvited the PRC from the 2018 edition of
the U.S.-hosted RIMPAC maritime exercise
over the PRC’s continued militarization of the
sites. 140
Figure 3. The South China Sea
To challenge what the United States considers
excessive maritime claims and to assert the
Source: Created by CRS using data from
U.S. right to fly, sail, and operate wherever
Department of State (2011, 2014, and 2015) and
international law allows, the U.S. military
TomTom (2013).
undertakes both FONOPs and presence
operations in the sea. In June 2019, Chinese Minister of National Defense Wei appeared to refer
to those operations when he complained that “some countries outside the region come to the
South China Sea to flex muscles, in the name of freedom of navigation.” He declared that, “The
large-scale force projection and offensive operations in the region are the most serious
destabilizing and uncertain factors in the South China Sea.”141
China and members of the Association of Southeast Asian Nations (ASEAN) are involved in
negotiations over a Code of Conduct for the South China Sea. In November 2018, China’s
Premier, Li Keqiang, set a deadline of 2021 to complete the negotiations.142 The parties have not
made public the latest draft of their negotiating text, but an initial August 2018 draft reportedly
included proposed language from China stating that, “The Parties shall not hold joint military
exercises with countries from outside the region, unless the parties concerned are notified
beforehand and express no objection.”143 Such language would appear to target U.S. military
139 Department of Defense, “Indo-Pacific Strategy Report: Preparedness, Partnerships, and Promoting a Networked
Region,” June 1, 2019, https://media.defense.gov/2019/May/31/2002139210/-1/-1/1/
DOD_INDO_PACIFIC_STRATEGY_REPORT_JUNE_2019.PDF.
140 Megan Eckstein, “China Disinvited from Participating in 2018 RIMPAC Exercise,” USNI News, May 23, 2018.
141 “Speech at the 18th Shangri-La Dialogue by Gen. Wei Fenghe, State Councilor and Minister of National Defense,
PRC,” Global Times via Ministry of National Defense of the PRC, June 2, 2019, http://eng.mod.gov.cn/focus/2019-06/
02/content_4842880.htm.
142 “China Hopes to Complete Talks on South China Sea Code of Conduct in 3 Years,” Xinhua, November 13, 2018,
http://www.xinhuanet.com/english/2018-11/13/c_137603619.htm.
143 Carl Thayer, “A Closer Look at the ASEAN-China Single Draft South China Sea Code of Conduct,” August 3,
2018, https://thediplomat.com/2018/08/a-closer-look-at-the-asean-china-single-draft-south-china-sea-code-of-conduct/.
See also, Nguyen Minh Quang, “Saving the China-ASEAN South China Sea Code of Conduct,” The Diplomat, June
29, 2019, https://thediplomat.com/2019/06/saving-the-china-asean-south-china-sea-code-of-conduct/.
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exercises with allies and partners, including such ASEAN members as the Philippines, Thailand,
and Vietnam.
In 2013, the Philippines sought arbitration under UNCLOS over PRC actions in the South China
Sea. An UNCLOS arbitral tribunal ruled in 2016 that China’s nine-dash line claim had “no legal
basis.” The ruling also stated that none of the land features in the Spratlys is entitled to any more
than a 12-nautical mile territorial sea; that three of the Spratlys features that China occupies
generate no entitlement to maritime zones; and that China violated the Philippines’ sovereign
rights in various ways.144 China declined to participate in the arbitration process and declared the
ruling “null and void.”145
Human Rights and Rule of Law146
After consolidating power in 2013, Xi Jinping intensified and expanded the reassertion of party
control over society that began during the final years of his predecessor, Hu Jintao, who served as
CPC General Secretary from 2002 to 2012. Since 2015, China’s government has enacted new
national laws that strengthen the role of the state over a wide range of social activities in the name
of national security and authorize greater controls over the Internet and ethnic minority groups.
Government arrests of human rights advocates and lawyers, which intensified in 2015, were
followed by Party efforts to instill ideological conformity in various spheres of society. In 2016,
Xi launched a policy known as “Sinicization,” by which China’s religious populations,
particularly Tibetan Buddhists, Muslims, and Christians who worship in churches that are not
registered with the government, are required to conform to Han Chinese culture, the socialist
system, and Communist Party policies.147
Xinjiang148
In the name of combating terrorism and religious extremism, authorities in China’s northwest
region of Xinjiang have since 2017 undertaken the mass internment of Turkic Muslims, mainly
ethnic Uyghurs (also spelled “Uighurs”), in ideological reeducation centers. Scholars, human
rights activists, and the U.S. government allege that those detained without formal charges
include an estimated 1.5 million Uyghurs out of a population of about 10.5 million, and a smaller
number of ethnic Kazakhs.149 Nearly 400 prominent Uyghur intellectuals reportedly have been
144 Permanent Court of Arbitration, “In the Matter of the South China Sea Arbitration Before an Arbitral Tribunal
Constituted Under Annex VII to the 1982 United Nations Convention on the Law of the Sea between the Republic of
the Philippines and the People’s Republic of China: Award,” Case Nº 2013-19, July 12, 2016,
https://www.pcacases.com/pcadocs/PH-CN%20-%2020160712%20-%20Award.pdf.
145 Ministry of Foreign Affairs of the PRC, “Statement of the Ministry of Foreign Affairs of the People’s Republic of
China on the Award of 12 July 2016 of the Arbitral Tribunal in the South China Sea Arbitration Established at the
Request of the Republic of the Philippines,” July 12, 2016, https://www.fmprc.gov.cn/mfa_eng/zxxx_662805/
t1379492.shtml.
146 See CRS In Focus IF11240, Human Rights in China, by Thomas Lum and Michael A. Weber.
147 Han Chinese, the majority ethnic group in China, make up about 91% of the country’s population and dominate its
culture. United States Commission on International Religious Freedom, 2018 Annual Report, April 25, 2018; Library
of Congress, Global Legal Monitor, “China: Revised Regulations on Religious Affairs,” November 9, 2017,
http://www.loc.gov/law/foreign-news/article/china-revised-regulations-on-religious-affairs/; “Full Text of Xi Jinping’s
Report at the 19th CPC National Congress, October 18, 2017,” Xinhua, November 4, 2017.
148 See CRS In Focus IF10281, Uyghurs in China, by Thomas Lum.
149 Mamatjan Juma, “‘At Least One Million People in the Camps Full Time’: Deputy Assistant Secretary Scott Busby,”
Radio Free Asia, May 15, 2019; “Apartheid with Chinese Characteristics,” The Economist, May 31, 2018; Adrian
Zenz, “New Evidence for China’s Political Re-education Campaign in Xinjiang,” China Brief (Jamestown
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detained or their whereabouts are unknown.150 Many detainees reportedly are forced to express
their love of the Communist Party and Xi, sing patriotic songs, and renounce or reject many of
their religious beliefs and customs.151 According to former detainees, treatment and conditions in
the camps include beatings, food deprivation, and crowded and unsanitary conditions.152
PRC officials describe the Xinjiang camps as “vocational education and training centers” in
which “trainees” undertake a curriculum of “standard spoken and written Chinese, understanding
of the law, vocational skills, and deradicalization.”153 In July 2019, a Xinjiang official claimed
that the majority of those who return from the camps “find suitable jobs that they really like, and
they can earn a satisfactory living.”154 Many Uyghurs living abroad say they still have not heard
from missing relatives in Xinjiang.155
In July 2019, at the second Ministerial to Advance Religious Freedom hosted by the Department
of State, Secretary of State Mike Pompeo said, “China is home to one of the worst human rights
crises of our time; it is truly the stain of the century.”156 The Administration was reported to be
considering sanctions under the Global Magnitsky Human Rights Accountability Act against
officials in Xinjiang, but these actions reportedly were set aside during the U.S.-China bilateral
trade negotiations, possibly for fear of disrupting progress.157
On July 8, 2019, 22 nations at the United Nations Human Rights Council (UNHRC) issued a joint
statement to the UNHRC president and U.N. High Commissioner on Human Rights calling on
China to “refrain from the arbitrary detention and restrictions on freedom of movement of
Uighurs, and other Muslim and minority communities in Xinjiang” and to “allow meaningful
access to Xinjiang for independent international observers.”158 On July 12, 2019, envoys from 37
countries, including over one dozen Muslim-majority countries, cosigned a counter-letter to the
Foundation), May 15, 2018.
150 Uyghur Human Rights Project, “Detained and Disappeared: Intellectuals Under Assault in the Uyghur Homeland,”
March 25, 2019.
151 “China Runs Region-wide Re-education Camps in Xinjiang for Uyghurs and other Muslims,” Radio Free Asia,
September 11, 2017. Nathan VanderKlippe, “It Is About Xi as the Leader of the World,” The Globe and Mail, July 3,
2018.
152 “Inside the Camps Where China Tries to Brainwash Muslims Until They Love the Party and Hate Their Own
Culture,” South China Morning Post, May 17, 2018.
153 State Council Information Office of the PRC, “Vocational Education and Training in Xinjiang,” White Paper,
August 2019, http://english.scio.gov.cn/2019-08/16/content_75106484.htm.
154 “新疆自治区主席、副主席谈教培中心：多数学员已结业 九成以上找到工作” (“Xinjiang Chairman and Vice
Chairman Discuss Education and Training Centers: Most Students Have Graduated, 90% Have Found Work”) (CRS
translation), China News, July 30, 2019, http://www.chinanews.com/edu/shipin/cns/2019/07-30/news825592.shtml;
State Council Information Office of the PRC, “SCIO Briefing on Xinjiang’s Development,” July 30, 2019,
http://english.scio.gov.cn/m/pressroom/2019-08/01/content_75055136.htm.
155 “China’s Claim That Most Uyghurs Have Been Freed from the Camps ‘Devoid of Credibility,’” Radio Free Asia,
July 30, 2019.
156 David Brunnstrom and Lesley Wroughton, “Pompeo Calls China’s Treatment of Uighurs ‘Stain of the Century,’”
Reuters, July 18, 2019.
157 Ibid; Alan Rappeport and Edward Wong, “In Push for Trade Deal, Trump Administration Shelves Sanctions over
China’s Crackdown on Uighurs,” New York Times, May 4, 2019.
158 The 22 signatories of the joint statement are Australia, Austria, Belgium, Canada, Denmark, Estonia, Finland,
France, Germany, Iceland, Ireland, Japan, Latvia, Lithuania, Luxembourg, the Netherlands, New Zealand, Norway,
Spain, Sweden, Switzerland, and the United Kingdom. “Nearly Two-Dozen Nations Urge China to End Mass
Incarcerations in Xinjiang at UN Rights Council,” Radio Free Asia, July 10, 2019. See the text of the letter at
https://www.hrw.org/sites/default/files/supporting_resources/190708_joint_statement_xinjiang.pdf.
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UNHRC in support of China’s policies in Xinjiang.159 As of July 29, 2019, China said the number
of countries signing the counter-letter had risen to 50.160
Hong Kong161
Hong Kong is a Special Administrative Region (SAR) of the PRC located off China’s southern
coast with a population of 7.5 million people, including about 85,000 U.S. citizens.162
Sovereignty of the former British colony reverted to the PRC on July 1, 1997, under the
provisions of a 1984 international treaty—known as the “Joint Declaration”—negotiated between
China and the United Kingdom. Among other things, the Joint Declaration promises Hong Kong
a “high degree of autonomy, except in foreign and defence affairs” and pledges that Hong Kong’s
“current social and economic systems” will remain unchanged for at least 50 years. As required
by the Joint Declaration, on April 4, 1990, China’s National People’s Congress passed the Basic
Law of the Hong Kong Special Administrative Region of the People’s Republic of China (Basic
Law), which serves as a mini-constitution for the city. The United States-Hong Kong Policy Act
of 1992 (P.L. 102-383, 22 U.S.C. 5701-5732) affords Hong Kong separate treatment from China
in a variety of political, economic, trade, and other areas so long as the HKSAR remains
“sufficiently autonomous.”
Since June 2019, hundreds of thousands of Hong Kongers have joined large rallies and marches
against proposed legal amendments that would for the first time allow extraditions to Mainland
China. Chief Executive Carrie Lam Cheng Yuet-ngor suspended consideration of the amendments
in response to the demonstrations in early June, but has also characterized the demonstrations as
“riots,” and authorized the Hong Kong Police Force to use tear gas, rubber bullets, pepper spray,
and truncheons to break up the protests.163 In response, the demonstrators have expanded their
demands to include that Lam fully withdraw the amendments, drop all charges against arrested
protesters, renounce her characterization of the demonstrations as “riots,” set up an independent
commission to investigate alleged police misconduct, and implement the election of the Chief
Executive and Legislative Council by universal suffrage, as promised in the Basic Law.
159 The 37 original signatories of the letter supporting China’s policies in Xinjiang are Algeria, Angola, Bahrain,
Belarus, Bolivia, Burkina Faso, Burundi, Cambodia, Cameroon, Comoros, Congo, Cuba, Democratic People’s
Republic of Korea, Democratic Republic of the Congo, Egypt, Eritrea, Gabon, Kuwait, Laos, Myanmar, Nigeria,
Oman, Pakistan, Philippines, Qatar, Russia, Saudi Arabia, Somalia, South Sudan, Sudan, Syria, Tajikistan, Togo,
Turkmenistan, United Arab Emirates, Venezuela, and Zimbabwe. “Saudi Arabia among 37 States Backing China’s
Xinjiang Policy of Detaining One Million Muslims,” The Arab American, July 13, 2019. See the text of the letter at
https://www.hrw.org/sites/default/files/supporting_resources/190712_joint_counterstatement_xinjiang.pdf.
160 Ministry of Foreign Affairs of the PRC, “Foreign Ministry Spokesperson Hua Chunying's Regular Press
Conference,” July 29, 2019, https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/t1684227.shtml.
161 SeeCRS CRS In Focus IF11295, Hong Kong’s Protests of 2019, by Michael F. Martin; CRS In Focus IF11248,
Hong Kong’s Proposed Extradition Law Amendments, by Michael F. Martin; CRS In Focus IF10500, Hong Kong’s
Legislative Council (Legco), by Michael F. Martin; and CRS In Focus IF10956, Hong Kong: Recent Developments and
U.S. Relations, by Michael F. Martin.
162 Estimated population according to Hong Kong’s Census and Statistics Department. The U.S. Department of State
states that “approximately 85,000” U.S. citizens reside in Hong Kong (Department of State, “U.S. Relations with Hong
Kong,” press release, July 17, 2018). The HKSAR 2016 by-census reports that approximately 15,000 “Americans”
reside in Hong Kong. The large discrepancy may be a function of the HKSAR categorizing Hong Kong permanent
residents who are also U.S. citizens as Hong Kongers.
163 Vimvam Tong and Anne Marie Roantree, “Hong Kong Leader Says Protesters in Latest Clashes Can Be Called
‘Rioters,’” Reuters, July 15, 2019, https://www.reuters.com/article/us-hongkong-extradition-lam/hong-kong-leadersays-protesters-in-latest-clashes-can-be-called-rioters-idUSKCN1UA0ME.
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China’s state media have accused the United States of covertly instigating and directing the unrest
in Hong Kong. On August 8, 2019, they circulated a photograph of a political officer at the U.S.
Consulate General in Hong Kong meeting with opposition leaders at a hotel, accusing her of
being “the behind-the-scenes black hand creating chaos in Hong Kong.”164 Like Chief Executive
Lam, President Trump has termed the demonstrations in Hong Kong “riots.” The President has
indicated that the situation is for China’s central government and the HKSAR government to
work out, has praised President Xi’s handling of the Hong Kong protests, and stated that he does
not see the situation in Hong Kong providing leverage in ongoing talks with China.165 He has also
indicated, however, that “it would be very hard to deal if they [China] do violence. I mean, if it’s
another Tiananmen Square, it’s—I think it’s a very hard thing to do if there’s violence.”166 The
cochairs of the Tom Lantos Human Rights Commission and other Members of Congress have
called for the Trump Administration to stop U.S. sales of tear gas, pepper spray, and other riot
gear to the Hong Kong Police Force.167
Hong Kongers have taken to the streets in large numbers twice before to protest China’s alleged
failure to fulfill its obligations under the Joint Declaration or to abide by the provisions of the
Basic Law. On July 1, 2003, an estimated 500,000 Hong Kong residents rallied against a
proposed antisedition bill that they believed would sharply curtail their rights.168 Large numbers
of Hong Kong residents protested again beginning on September 26, 2014, against PRC
restrictions on a proposal to elect the Chief Executive by universal suffrage. Those protests
became known as the “Umbrella Movement.”169
Tibet170
U.S. policy toward Tibet is guided by the Tibetan Policy Act of 2002 (P.L. 107-228), which
requires the U.S. government to promote and report on dialogue between Beijing and Tibet’s
exiled spiritual leader, the Dalai Lama, or his representatives; to help protect Tibet’s religious,
cultural, and linguistic heritages; and to support development projects in Tibet. The act requires
the State Department to maintain a Special Coordinator for Tibetan Issues. (The position has been
vacant throughout the Trump Administration.) The act also calls on the Secretary of State to
“make best efforts” to establish a U.S. consular office in the Tibetan capital, Lhasa; and directs
U.S. officials to press for the release of Tibetan political prisoners in meetings with the Chinese
government.
164 Andrew Higgins, “China’s Theory for Hong Kong Protests: Secret American Meddling,” New York Times, August
8, 2019, https://www.nytimes.com/2019/08/08/world/asia/hong-kong-black-hand.html.
165 The White House, “Remarks by President Trump Before Marine One Departure,” August 21, 2019,
https://www.whitehouse.gov/briefings-statements/remarks-president-trump-marine-one-departure-60/; The White
House, “Remarks by President Trump Before Marine One Departure,” August 1, 2019, https://www.whitehouse.gov/
briefings-statements/remarks-president-trump-marine-one-departure-56/; The White House, “Remarks by President
Trump and Prime Minister Khan of the Islamic Republic of Pakistan Before Bilateral Meeting,” July 22, 2019,
https://www.whitehouse.gov/briefings-statements/remarks-president-trump-prime-minister-khan-islamic-republicpakistan-bilateral-meeting/.
166 The White House, “Remarks by President Trump Before Air Force One Departure,” August 18, 2019,
https://www.whitehouse.gov/briefings-statements/remarks-president-trump-air-force-one-departure-12/.
167 Tom Lantos Human Rights Commission, “Co-Chairs Call for Suspension of Sales to Hong Kong Police,” August 2,
2019, https://humanrightscommission.house.gov/news/press-releases/co-chairs-call-suspension-sales-hong-kongpolice.
168 Keith Bradsher, “Hundreds of Thousands in Hong Kong Protest Security Laws,” New York Times, July 1, 2003.
169 See CRS In Focus IF10005, Protests in Hong Kong: The “Umbrella Movement” (Update), by Michael F. Martin.
170 See CRS Report R43781, The Tibetan Policy Act of 2002: Background and Implementation, by Susan V. Lawrence.
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The U.S. government and human rights groups have been critical of increasingly expansive
official Chinese controls on religious life and practice in Tibetan areas of China instituted in the
wake of anti-Chinese protests in 2008. Human rights groups have catalogued arbitrary detentions
and disappearances; a heightened Chinese security presence within monasteries; continued
“patriotic education” and “legal education” campaigns that require monks to denounce the Dalai
Lama; strengthened media controls; and policies that weaken Tibetan-language education.
PRC restrictions on access to Tibet for foreigners prompted Congress to pass, and the President to
sign, the Reciprocal Access to Tibet Act (RATA) (P.L. 115-330). Enacted in December 2018,
RATA requires the Department of State to report to Congress annually regarding the level of
access PRC authorities granted U.S. diplomats, journalists, and tourists to Tibetan areas in China.
It also states that no individual “substantially involved in the formulation or execution of policies
related to access for foreigners to Tibetan areas” may be granted a visa or admitted to the United
States so long as restrictions on foreigners’ access to Tibet remain in place. The Department of
State is required to submit annually a list of PRC officials “substantially involved” in such
policies, and to identify those whose visas were denied or revoked in the previous year.
Of growing concern to human rights groups and foreign governments is China’s insistence on
controlling the succession process for the Dalai Lama. Now aged 84, the Dalai Lama is the 14th in
a lineage that began in the 14th century, with each new Dalai Lama identified in childhood as the
reincarnation of his predecessor. As a spokesperson for China’s Foreign Ministry restated in
March 2019, the PRC’s position is that, “reincarnation of living Buddhas including the Dalai
Lama must comply with Chinese laws and regulations and follow religious rituals and historical
conventions.”171 In July 2019, a Chinese official told visiting Indian journalists that the Dalai
Lama’s reincarnation would be required to be found in China and approved by the central
government in Beijing, adding, “The Dalai Lama’s reincarnation is not decided by his personal
wish or by some group of people living in other countries.”172 In 2011, however, the Dalai Lama
asserted that, “the person who reincarnates has sole legitimate authority over where and how he
or she takes rebirth and how that reincarnation is to be recognized.”173
China lobbies strenuously to prevent world leaders from meeting with the Dalai Lama, the 1989
Nobel Peace Prize winner and 2006 recipient of the Congressional Gold Medal. U.S. Presidents
since George H. W. Bush have met with the Dalai Lama. President Trump has not so far done so.
Use of Surveillance Technology
PRC methods of social and political control are evolving to include the widespread use of
sophisticated surveillance and big data technologies. Chinese authorities and companies have
developed and deployed tens of millions of surveillance cameras, as well as facial, voice, iris, and
gait recognition equipment, to reduce crime. The government uses the same equipment to target
and track the movements and internet-use of ethnic Tibetans and Uyghurs and critics of the
171 Ministry of Foreign Affairs of the PRC, “Foreign Ministry Spokesperson Geng Shuang's Regular Press Conference
on March 19, 2019,” March 19, 2019, https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/
t1646704.shtml.
172 “Next Dalai Lama Must Be Chosen within China; India Should Not Intervene: Chinese Authorities,” Press Trust of
India via The Hindu, July 14, 2019, https://www.thehindu.com/news/international/next-dalai-lama-must-be-chosenwithin-china-india-should-not-intervene-chinese-authorities/article28428511.ece.
173 His Holiness the 14th Dalai Lama of Tibet, “Reincarnation,” September 24, 2011, http://www.dalailama.com/
biography/reincarnation. The Dalai Lama has several times told interviewers that he may not reincarnate. See, for
example, “Dalai Lama Concedes He May Be the Last,” BBC News, December 17, 2014.
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regime.174 In addition, the government is developing a “social credit system,” involving
aggregating data on companies and individuals across geographic regions and industries, and
“creating measures to incentivize ‘trustworthy’ conduct, and punish ‘untrustworthy’ conduct.”175
Increasingly, Chinese companies are exporting data and surveillance technologies around the
world. In April 2019, the Australian Strategic Policy Institute (ASPI), an Australian-based
nonpartisan think tank, launched a public database, funded by the U.S. Department of State,
mapping the overseas activities of a dozen leading Chinese technology companies. Among other
projects, it shows Chinese firms involved in installing 5G networks in 34 countries and deploying
so-called “safe cities” surveillance technologies in 46 countries.176 In an October 2018 report
partly funded by the U.S. Department of State, independent research and advocacy organization
Freedom House identified 38 countries in which Chinese companies had installed internet and
mobile networking equipment, 18 countries that had deployed intelligent monitoring systems and
facial recognition developed by Chinese companies, and 36 countries in which media elites and
government officials had traveled to China for trainings on new media or information
management. The same report, Freedom on the Net 2018, ranked China last in internet and digital
media freedom of 65 countries tracked, just ahead of Iran, Syria, and Ethiopia, the fourth year
China held that position in Freedom House’s rankings.177
Taiwan178
When the Carter Administration established diplomatic relations with the PRC on January 1,
1979, it terminated formal diplomatic ties with self-ruled Taiwan, over which the PRC claims
sovereignty. In joint communiques with China signed in 1978 and 1982, the United States stated
that it “acknowledges the Chinese position that there is but one China and Taiwan is part of
China,” but did not state its own position on Taiwan’s status. Under the U.S. “one-China” policy,
the United States maintains only unofficial relations with Taiwan, while upholding the 1979
Taiwan Relations Act (P.L. 96-8), which provides a legal basis for the unofficial relationship and
includes commitments related to Taiwan’s security.
The PRC frequently reminds the United States that, for Beijing, “The Taiwan question is the most
important and sensitive one in China-US relations.”179 Beijing is particularly wary of U.S. moves
that the PRC sees as introducing “officiality” into the U.S.-Taiwan relationship, and regularly
protests U.S. legislation supporting Taiwan, U.S. arms sales to Taiwan, and U.S. Navy transits of
the Taiwan Strait. (The U.S. Navy conducted seven such transits between January and August
174 Human Rights Watch, “China’s Algorithms of Repression,” May 1, 2019, https://www.hrw.org/report/2019/05/01/
chinas-algorithms-repression/reverse-engineering-xinjiang-police-mass-surveillance; U.S. Department of State,
Country Reports on Human Rights Practices for 2018, March 13, 2019, https://www.state.gov/reports/2018-countryreports-on-human-rights-practices/china-includes-tibet-hong-kong-and-macau-china/.
175 Jeremy Daum, “China Through a Glass, Darkly,” China Law Translate, December 24, 2017.
176 Danielle Cave, Samantha Hoffman, Alex Joske, Fergus Ryan and Elise Thomas, Mapping China’s Technology
Giants, Australian Strategic Policy Institute, International Cyber Policy Centre, Report No. 15, 2019,
https://www.aspi.org.au/report/mapping-chinas-tech-giants. Database accessible at https://chinatechmap.aspi.org.au.
177 Freedom on the Net 2018: The Rise of Digital Authoritarianism, Freedom House, October 2018,
https://freedomhouse.org/report/freedom-net/freedom-net-2018/rise-digital-authoritarianism.
178 See CRS In Focus IF10275, Taiwan: Select Political and Security Issues, by Susan V. Lawrence; CRS In Focus
IF10256, U.S.-Taiwan Trade Relations, by Wayne M. Morrison; and CRS Report R44996, Taiwan: Issues for
Congress, by Susan V. Lawrence and Wayne M. Morrison.
179 Ministry of Foreign Affairs of the PRC, “Foreign Ministry Spokesperson Hua Chunying's Regular Press
Conference,” July 25, 2019, https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/t1683397.shtml.
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2019.)180 The United States objects to PRC efforts to isolate Taiwan internationally and to the
PRC’s real and implied threats of force against Taiwan, including bomber, fighter, and
surveillance aircraft patrols around and near the island.
After initially questioning the U.S. “one-China” policy after his November 2016 election victory,
President Trump used a February 9, 2017, telephone call with President Xi to recommit the
United States to it.181 The Trump Administration’s NSS states that the United States “will
maintain our strong ties with Taiwan in accordance with our ‘One China’ policy, including our
commitments under the Taiwan Relations Act to provide for Taiwan’s legitimate defense needs
and deter coercion.”182
Trump Administration language on Taiwan has evolved since 2017. DOD’s June 2019 IndoPacific Strategy Report discusses Taiwan without referencing the U.S. “one-China” policy. In a
first for a high-profile U.S. government report in the era of unofficial relations, it also refers to
Taiwan as a “country.” The strategy presents Taiwan, along with Singapore, New Zealand, and
Mongolia, as Indo-Pacific democracies that are “reliable, capable, and natural partners of the
United States.” The document asserts that, “The United States has a vital interest in upholding the
rules-based international order, which includes a strong, prosperous, and democratic Taiwan.”183
In 2018, the 115th Congress passed and President Trump signed the Taiwan Travel Act (P.L. 115135), stating that it should be U.S. policy to allow U.S. officials at all levels, “including Cabinetlevel national security officials, general officers, and other executive branch officials,” to travel to
Taiwan for meetings with counterparts, and to allow high-level Taiwan officials to enter the
United States under respectful conditions to meet with U.S. officials, “including officials from the
Department of State and the Department of Defense and other Cabinet agencies.” In May 2019,
the United States hosted a meeting between the U.S. and Taiwan National Security Advisors, the
first such meeting publicly disclosed since the United States broke diplomatic relations with
Taiwan in 1979.184 In July 2019, the Trump Administration allowed Taiwan President Tsai Ingwen to make high-profile “transit” visits through New York City and Denver, CO, on her way to
and from visiting diplomatic allies in the Caribbean. Each visit spanned three days. The New
York City transit included a brief closed-door speech at Columbia University, a walk in Central
Park, and an event at Taiwan’s representative office for the U.N. representatives of Taiwan’s
diplomatic partners.185 Since 1995, U.S. policy has allowed Taiwan presidents to visit the United
States only on transit visits through the United States on their way to other locations.
180 Ben Werner, “USS Green Bay Transits Taiwan Strait,” U.S. Naval Institute News, August 23, 2019,
https://news.usni.org/2019/08/23/uss-green-bay-transits-taiwan-strait.
181 The White House, “Readout of the President’s Call with President Xi Jinping of China,” February 9, 2017,
https://www.whitehouse.gov/briefings-statements/readout-presidents-call-president-xi-jinping-china/.
182 The White House, National Security Strategy of the United States, December 2017.
183 Department of Defense, “Indo-Pacific Strategy Report: Preparedness, Partnerships, and Promoting a Networked
Region,” June 1, 2019, https://media.defense.gov/2019/May/31/2002139210/-1/-1/1/
DOD_INDO_PACIFIC_STRATEGY_REPORT_JUNE_2019.PDF.
184 Yimou Lee and Ben Blanchard, “China Bridles at Rare Meeting Between Taiwan and U.S. Security Officials,”
Reuters, May 26, 2019, https://www.reuters.com/article/us-usa-taiwan/china-bridles-at-rare-meeting-between-taiwanand-u-s-security-officials-idUSKCN1SX077.
185 Wen Kuei-hsiang and Elizabeth Hsu, “Taiwan President Meets with Envoys to U.N. During New York Stopover,”
Central News Agency (CNA) (Taiwan) via Focus Taiwan, July 12, 2019, http://focustaiwan.tw/news/AIPL/
201907120002.aspx; Stacy Hsu and Ozzy Yin, “Tsai Calls for Global Support for ‘Free Taiwan’ at Columbia Speech,”
CNA, July 13, 2019, http://focustaiwan.tw/news/aipl/201907130005.aspx.
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The Trump Administration has notified Congress of 11 Taiwan FMS cases on five separate dates.
The combined value of the 11 FMS cases is about $11.76 billion. (See Table 7.) On July 12,
2019, in apparent response to Tsai’s visit to New York City and the Administration’s July 8, 2019,
arms sale notification, China’s Ambassador to the United States, Cui Tiankai, wrote on Twitter,
“Taiwan is part of China. No attempts to split China will ever succeed. Those who play with fire
will only get themselves burned. Period.”186 In response to the Administration’s August 20, 2019,
notification of the proposed sale of F-16C/D Block 70 fighter planes to Taiwan, Chinese Foreign
Ministry spokesperson Geng Shuang said China might sanction U.S. companies, stating, “China
will take every necessary measure to safeguard its interests, including sanctioning American
companies involved in the arms sale this time.”187
Table 7. Trump Administration Notifications of Major
Foreign Military Sales to Taiwan
Date
Major Items
Value
August 20, 2019
66 F-16C/D Block 70 Aircraft and related equipment and support, including
75 General Electric F110 fighter engines.
$8 billion
July 8, 2019
108 M1A2T Abrams tanks and related equipment and support
$1.45 billion
July 8, 2019
250 Block I-92F MANPAD Stinger missiles and 4 Block I-92F MANPAD
Stinger fly-to-buy missiles, and related equipment and support
$114.13
million
April 15, 2019
Continuation of pilot training program and maintenance/logistics support
for F-16 aircraft currently at the Luke Air Force Base, Arizona
est. $500
million
September 24,
2018
Cooperative Logistics Supply Support arrangement for stock replenishment
supply of spare parts and repair/replace of spare parts for F- I 6, C-130, F5, Indigenous Defense Fighter (IDF), and all other aircraft systems and
subsystems.
$330 million
June 29, 2017
50 AGM-88B High-Speed Anti-Radiation Missiles (HARMs), 10 AGM 88-B
Training HARMs, and related support and materials
$147.5 million
June 29, 2017
16 Standard Missile-2 (SM-2) Block IIIA All-Up Rounds (AUR), 47 MK 93
MOD 1 SM-2 Block IIIA Guidance Sections (GSs), 5 MK 45 MOD 14 SM-2
Block IIIA Target Detecting Devices (TDDs) Shrouds and related
equipment and support
$125 million
June 29, 2017
46 MK-48 Mod 6AT Heavyweight Torpedoes (HWT) and related
equipment and support
$250 million
June 29, 2017
MK-54 Lightweight Torpedo (LWT) Conversion Kits and related
equipment and support
$175 million
June 29, 2017
56 AGM-154C Joint Standoff Weapons (JSOW) Air-to-Ground Missiles and
related equipment and support
$185.5 million
June 29, 2017
Upgrade of AN/SLQ-32(V)3 Electronic Warfare Systems in support of 4
ex-KIDD Class destroyers
$80 million
June 29, 2017
SRP Operations and Maintenance follow-on sustainment package
$400 million
Source: Compiled from notifications from 2017 to 2019 posted on the website of the Defense Security
Cooperation Agency (DSCA).
186 Cui Tiankai on Twitter, July 10, 2019, https://twitter.com/AmbCuiTiankai/status/1149695176358715392.
187 Ministry of Foreign Affairs of the PRC, “Foreign Ministry Spokesperson Geng Shuang’s Regular Press
Conference,” August 21, 2019, https://www.fmprc.gov.cn/mfa_eng/xwfw_665399/s2510_665401/2511_665403/
t1690680.shtml.
Congressional Research Service
38
U.S.-China Relations
Select Other Issues
Climate Change
Both China and the United States are parties to the 1992 United Nations Framework Convention
on Climate Change (UNFCCC), the objective of which is to stabilize human-induced climate
change. The two countries are widely viewed as having pivotal roles to play in efforts to achieve
that goal as they are, respectively, the first- and second-ranking contributors to global greenhouse
gas (GHG) emissions.188
While China emits more than twice as much carbon dioxide (CO2, the major human-related
GHG) as the United States, comparing the nations’ levels of effort to address their GHG
emissions can be complicated. For example, while China emits more CO2 to produce a unit of
GDP (its “energy intensity”), China has reduced and continues to reduce its energy intensity more
rapidly due to structural changes and policies. The United States is one of the highest global
emitters of GHG per person, at twice China’s rates, due in large part to higher incomes and rates
of consumption. Some U.S. consumption results in GHG emissions from manufacturing in China.
China’s emissions per person have been rising with incomes and consumption; its total emissions
may continue to rise with incomes and the size of its economy. Under current policies, U.S.
emissions may remain largely flat through the 2020s and could grow from the 2030s.189
China has pledged that its emissions will peak before 2030. Under current projections and
pledges, it is unclear whether China’s GHG emissions will grow, remain stable, or decline toward
the “net zero” emissions that would be required to stabilize human-induced climate change. China
has set ambitious targets for expanding its supply of energy from non-GHG-emitting sources,
improving energy efficiency, and reducing air pollution coemitted with GHG. In this decade,
China’s efforts have demonstrated measurable effects in reducing the penetration of coal use,
energy intensity, and air pollution. Policies in place would not likely reduce GHG emissions
toward near-zero, however.190
The United States and China have cooperated on environmental and energy projects for several
decades. Although U.S. policy attention to the two countries’ Clean Energy Cooperation program
has declined, joint research continues on Carbon Capture and Storage (CCS) technologies, energy
efficiency, vehicles, water-energy, and nuclear energy.191 China is developing a national GHG cap
188 See CRS Report R45086, Evolving Assessments of Human and Natural Contributions to Climate Change, by Jane
A. Leggett, and CRS In Focus IF10379, China’s Greenhouse Gas and Energy Proposals for 2016-2020, by Jane A.
Leggett. According to the U.S. Energy Information Administration, in 2016, China’s and the United States’ energyrelated CO2 emissions we
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