China-U.S. Relations: Current Issues and Implications for U.S. Policy

Publication Date: September 2006

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Government

Type:

Coverage: China Taiwan

Abstract:

In the George W. Bush Administration, U.S.-China relations have remained unusually smooth and stable. But U.S. policy toward China now appears to be subject to competing reassessments. State Department officials in 2005 unveiled what they said was a new policy framework for the relationship -- one in which the United States was willing to work cooperatively with a non-democratic China while encouraging Beijing to become a "responsible stakeholder" in the global system. Other U.S. policymakers appear to be adopting tougher stances on issues involving China and U.S.-China relations, concerned about strong PRC economic growth and a more assertive and influential PRC diplomacy in the international arena.

Taiwan, which China considers a "renegade province," remains the most sensitive issue the two countries face and the one many observers fear could lead to Sino-U.S. conflict. Late in 2004 PRC officials created more tension over Taiwan by passing an "anti-secession" law (adopted in March 2005) aimed at curbing Taiwan independence. U.S. officials regarded the action as provocative and unconstructive. In February 2006, Taiwan President Chen Shui-bian suspended the activities of the National Unification Council, a symbol of Taiwan's commitment to unification with China, citing in part the 2005 anti-secession law as a reason for his action. Both the PRC and Taiwan moves have raised U.S. concerns about cross-strait stability.

Another matter of growing U.S. concern is China's increasing global "reach" and the consequences that PRC expanding international influence have for U.S. interests. To feed its appetite for resources, China is steadily signing trade agreements, oil and gas contracts, scientific cooperation agreements, and multilateral security arrangements with countries around the world, some of which are key U.S. allies. Some U.S. observers view these activities as a threat to the United States. Even if they are simply the natural outcome of China's economic development, they may pose critical future challenges for U.S. economic and political interests.

Much of U.S. concern about China appears driven by security calculations at the Pentagon and in Congress. In remarks in June 2005, Secretary of Defense Donald Rumsfeld questioned the motivations behind China's expanding military budget and stated that a congressionally mandated DOD report concludes Beijing is greatly understating its military expenditures. Bilateral economic and trade issues also remain matters of concern, with U.S. officials and Members of Congress this year particularly criticizing China's failure to halt piracy of U.S. intellectual property rights (IPR) and China's continued constraints on its currency valuation. In the February 2005 State Department Country Reports on Human Rights Practices, U.S. officials again classified China's human rights record as poor. Beijing continues its crackdown on independent religious organizations and political activists.

The 109th Congress is considering these and other issues in H.R. 5122, the Defense Authorization Act of FY2007, and S. 295, a bill to authorize punitive action if China's currency is not revaluated.