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Wednesday, April 28, 2010

Understanding China’s Political System

Michael F. Martin
Specialist in Asian Trade and Finance

Opaque and shrouded in secrecy, China's political system and decision-making processes are mysteries to many Westerners. At one level, China is a one-party state that has been ruled by the Chinese Communist Party (CCP) since 1949. But rather than being rigidly hierarchical and authoritarian, which is often the assumption, political power in China now is diffuse, complex, and at times highly competitive. Despite its grip on power, the Party and its senior leaders (the Politburo and its Standing Committee) are not always able to dictate policy decisions as they once did. Instead, present-day China's political process is infused with other political actors that influence and sometimes determine policy. 

Three other main actors co-exist with the Party at the top of China's political system. Chief among these is the muscular state government bureaucracy, whose structures closely parallel the Party's throughout China, operating in a largely separate but interlocking way to implement and administer state business. Another key institution is the People's Liberation Army, operating again largely separately and with a tenuous distinction between civilian, military, and Party leadership. Completing the top political institutions is the National People's Congress, constitutionally the highest organ of state power but in practice the weakest of the top political institutions. 

Other political actors in China include provincial and local officials; a growing body of official and quasi-official policy research groups and think tanks that feed proposals into the policy process; a collection of state sector, multinational, and even private business interests exerting pressure on policy decisions; a vigorous academic and university community; a diverse media that informs public opinion; and an increasingly vocal and better-informed citizenry that are demanding more transparency and accountability from government. New forms of communication and information availability also have pressured the PRC government to make changes in its political system, and have provided the Party with new means of maintaining political control. The political story in China today is the extent to which these multiple actors and changing circumstances have helped blur the communist regime's lines of authority. 

Chinese politics is further complicated by other factors. In the absence of a more formalized institutional infrastructure, personal affiliations can play a significant role in political decisions, adding unpredictability to an already murky process. In addition, discipline between the different levels of party and government structure can be tenuous, leading to ineffective implementation of policy and, in some cases, serious problems with corruption. 

Despite its internal problems, the PRC's Communist Party-led political system has proven exceedingly resilient to past and current challenges, but nevertheless is under stress and undergoing reluctant transition. Ironically, the Party's commitment to remaining in power appears to be forcing it to adapt continually to changing circumstances and to make incremental compromises with other participants in the political process when it is pragmatic to do so. A better understanding of how China's political system functions, as well as its strengths and weaknesses, may help U.S. lawmakers make more effective policy decisions that directly benefit U.S. interests.

Date of Report: April 14 2010
Number of Pages: 24
Order Number: R41007
Price: $29.95

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Monday, April 26, 2010

China Naval Modernization: Implications for U.S. Navy Capabilities—Background and Issues for Congress

Ronald O'Rourke
Specialist in Naval Affairs

The question of how the United States should respond to China's military modernization effort, including its naval modernization effort, has emerged as a key issue in U.S. defense planning. The issue is of particular importance to the U.S. Navy, because many U.S. military programs for countering improved Chinese military forces would fall within the Navy's budget. Decisions that Congress and the executive branch make regarding U.S. Navy programs for countering improved Chinese maritime military capabilities could affect the likelihood or possible outcome of a potential U.S.-Chinese military conflict in the Pacific over Taiwan or some other issue. Some observers consider such a conflict to be very unlikely, in part because of significant U.S.-Chinese economic linkages and the tremendous damage that such a conflict could cause on both sides. 

In the absence of such a conflict, the U.S.-Chinese military balance in the Pacific could influence day-to-day choices made by other Pacific countries, including choices on whether to align their policies more closely with China or the United States. In this sense, decisions that Congress and the executive branch make regarding U.S. Navy programs for countering improved Chinese maritime military forces could influence the political evolution of the Pacific, which in turn could affect the ability of the United States to pursue goals relating to various policy issues, both in the Pacific and elsewhere. 

China's naval modernization effort, which began in the 1990s, encompasses a broad array of weapon acquisition programs, including anti-ship ballistic missiles (ASBMs), submarines, and surface ships. China's naval modernization effort also includes reforms and improvements in areas such as doctrine and training. 

DOD and other observers believe that the near-term focus of China's military modernization effort has been to develop military options for addressing the situation with Taiwan. Consistent with this goal, observers believe that China wants its military to be capable of acting as a so-called anti-access force—a force that can deter U.S. intervention in a conflict involving Taiwan, or failing that, delay the arrival or reduce the effectiveness of intervening U.S. naval and air forces. Some observers believe that China's military modernization effort, including its naval modernization effort, is increasingly oriented toward pursuing additional goals, such asserting or defending China's claims in maritime territorial disputes, protecting China's sea lines of communications, displacing U.S. influence in the Pacific, and asserting China's status as a major world power. 

Placing an increased emphasis on U.S. Navy programs for countering improved Chinese maritime military capabilities in coming years could lead to one more of the following: increasing activities for monitoring and understanding developments in China's navy, as well as activities for measuring and better understanding operating conditions in the Western Pacific; assigning a larger percentage of the Navy to the Pacific Fleet; homeporting more of the Pacific Fleet's ships at forward locations such as Hawaii, Guam, and Japan; increasing training and exercises in operations relating to countering Chinese maritime anti-access forces, such as antisubmarine warfare (ASW) operations; and funding programs for developing and procuring highly capable ships, aircraft, weapons, and supporting C4ISR (command and control, communications, computers, intelligence, surveillance, and reconnaissance) systems.

Date of Report: April 9, 2010
Number of Pages: 49
Order Number: RL33153
Price: $29.95

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Friday, April 23, 2010

North Korea’s Second Nuclear Test: Implications of U.N. Security Council Resolution 1874

Mary Beth Nikitin, Coordinator
Analyst in Nonproliferation

Mark E. Manyin, Coordinator
Specialist in Asian Affairs

Emma Chanlett-Avery
Specialist in Asian Affairs

Dick K. Nanto
Specialist in Industry and Trade

The United Nations Security Council unanimously passed Res. 1874 on June 12, 2009, in response to North Korea's second nuclear test. The resolution puts in place a series of sanctions on North Korea's arms sales, luxury goods, and financial transactions related to its weapons programs, and calls upon states to inspect North Korean vessels suspected of carrying such shipments. The resolution does allow for shipments of food and nonmilitary goods. As was the case with an earlier U.N. resolution, 1718, that was passed in October 2006 after North Korea's first nuclear test, Resolution 1874 seeks to curb financial benefits that go to North Korea's regime and its weapons program. This report summarizes and analyzes Resolution 1874. In summary, the economic effect of Resolution 1874 is not likely to be great unless China cooperates extensively and goes beyond the requirements of the resolution and/or the specific financial sanctions cause a ripple effect that causes financial institutions to avoid being "tainted" by handling any DPRK transaction. 

On the surface, sanctions aimed solely at the Democratic People's Republic of Korea (DPRK, the official name of North Korea) and its prohibited activities are not likely to have a large monetary effect. Governments will have to interpret the financial sanctions ban of the resolution liberally in order to apply sanctions to the bank accounts of North Korean trading corporations. A key to its success will be the extent to which China, North Korea's most important economic partner, implements the resolution. A ban on luxury goods will only be effective if China begins to deny North Korea lucrative trade credits. 

Provisions for inspection of banned cargo on aircraft and sea vessels rely on the acquiescence of the shipping state. In the case of North Korean vessels, it is highly unlikely that they would submit to searches. Resolution 1874 is vague about how its air cargo provisions are to be implemented, in contrast to the specific procedures set forth regarding inspecting sea-borne cargo. While procedures are specified for sea interdictions, the authority given is ambiguous and optional. Further, DPRK trade in small arms and ammunition is relatively insignificant, and therefore the ban on those exports is unlikely to have a great impact. 

Other CRS Reports may be useful in conducting research on this issue: CRS Report RL30613, North Korea: Terrorism List Removal, by Larry A. Niksch; CRS Report RL33590, North Korea's Nuclear Weapons Development and Diplomacy, by Larry A. Niksch; CRS Report R40095, Foreign Assistance to North Korea, by Mark E. Manyin and Mary Beth NikitinCRS Report RL32493, North Korea: Economic Leverage and Policy Analysis, by Dick K. Nanto and Emma Chanlett-Avery; CRS Report RL33324, North Korean Counterfeiting of U.S. Currency, by Dick K. Nanto; CRS Report RL34256, North Korea's Nuclear Weapons: Technical Issues, by Mary Beth Nikitin; and CRS Report RL32097, Weapons of Mass Destruction Counterproliferation: Legal Issues for Ships and Aircraft, by Jennifer K. Elsea.


Date of Report: April 15, 2010
Number of Pages: 27
Order Number: R40684
Price: $29.95

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Tuesday, April 20, 2010

East Asian Regional Architecture: New Economic and Security Arrangements and U.S. Policy

Dick K. Nanto
Specialist in Industry and Trade

The global financial crisis, the end of the Cold War, the rise of China, globalization, free trade agreements, the war on terror, and an institutional approach to keeping the peace are causing dramatic shifts in relationships among countries in East Asia. A new regional architecture in the form of trade, financial, and political arrangements among countries of East Asia is developing that has significant implications for U.S. interests and policy. This report examines this regional architecture with a focus on China, South Korea, Japan, and Southeast Asia. The types of arrangements include bilateral free trade agreements (FTAs), regional trade pacts, currency and monetary arrangements, and political and security arrangements. 

The East Asian regional architecture is supported by two distinct legs. The economic leg is strong and growing more intense. A web of bilateral and regional FTAs is developing. An East Asian Economic Community (with 13 nations), an East Asian FTA (with 16 nations), and an Asia Pacific FTA (with 21 nations) are being discussed. In contrast, the political and security leg remains relatively underdeveloped. The most progress has been made with the Association of South East Asian Nations playing the role of convener and has taken the form of the ASEAN Security Community (10 Southeast Asian nations) and ASEAN Regional Forum (25 nations, including the United States). In Northeast Asia, the six-party talks aimed at resolving the North Korean nuclear program are ongoing. 

As U.S. policy toward economic and security arrangements in East Asia evolves, it is turning on matters of intensity, inclusiveness, and final structure. Should the United States intensify its efforts to either hinder or support the architecture? Who should be included in the arrangements? Should the groupings be exclusively Asian? On the economic side, current U.S. policy appears to be to hedge by not trying to block attempts to create exclusive Asian FTAs but doing deals to keep from being cut out from their benefits. On the security side, U.S. interest in stability, counter-terrorism, and nonproliferation in East Asia is so great that the United States has sought a seat at the table when Asians meet to address security issues. Some also have called for the United States to join the East Asia Summit or to create a Northeast Asia Regional Forum that would include the United States, China, Russia, Japan, and South Korea. 

At the core of U.S. concern over the developing regional architecture in East Asia is the growing influence of China. A danger exists that if China comes to dominate regional institutions in East Asia, it could steer them down a path inimical to U.S. interests. Some Asian nations, however, are wary of excessive Chinese influence and are hedging and maneuvering against possible Chinese dominance. 

On March 15, 2010, the United States began negotiating to join a regional, Asia-Pacific trade agreement, known as the Trans-Pacific Partnership (TPP) Agreement. The United States, Australia, Peru, and Vietnam are seeking to join with the four existing members of the pact: Singapore, Chile, Brunei, and New Zealand. The TPP could become the basis for a Free Trade Area of the Asia-Pacific over the long term. 

The final question for the policy deliberations on trade and security arrangements in East Asia is what form the architecture will take. The industrialized world seems to be evolving into three distinct blocs, North America, Europe, and East Asia, but a trans-Pacific trade and security arrangement that includes countries both of Asia and the Americas also is possible.

Date of Report: April 15, 2010
Number of Pages: 45
Order Number: RL33653
Price: $29.95

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Monday, April 19, 2010

China-U.S. Poultry Dispute

Renée Johnson
Specialist in Agricultural Policy

Geoffrey S. Becker
Specialist in Agricultural Policy

In April 2006, the U.S. Department of Agriculture's (USDA's) Food Safety and Inspection Service (FSIS) published a final rule allowing certain poultry products processed in China to be imported into the United States. However, USDA appropriations measures for recent years have prohibited FSIS from using funds to implement the rule. In October 2009, Congress enacted the FY2010 Agriculture appropriations bill (P.L. 111-80), which contains language that seeks to address this issue. Instead of continuing this prohibition, the FY2010 Agriculture appropriations bill allows USDA to use appropriated funds to implement the FSIS rule permitting U.S. imports of certain processed poultry and poultry products from China, if specified preconditions are met. 

The appropriations language is intended not only to ensure the safety of Chinese poultry imports but also to address trade concerns. The Chinese government has strongly criticized the ban on implementation of the rule as a violation of trade rules, and on April 17, 2009, it formally requested World Trade Organization (WTO) consultations on the issue, the first step toward referral to a dispute settlement panel. This panel was established later in 2009 and said it will issue its final report by July 2010. 

Many food safety advocates have supported the ban on the poultry rule, arguing that China—the third-leading foreign supplier of food and agricultural imports into the United States—lacks effective food safety protections. They have noted that China has experienced outbreaks of highly pathogenic avian influenza, and have argued that USDA's determination, that Chinese-processed poultry was appropriately regulated, was flawed. These advocates have argued, among other things, that China has been the source of a number of unsafe consumer products, including dairy products, infant formula, and wheat gluten (used in pet and animal feeds) intentionally contaminated with melamine to heighten measurable protein levels, and farmed seafood with illegal levels of antibiotics. 

Earlier, a coalition of U.S. animal product exporters had opposed appropriations language banning the China poultry rule. This group argued that the ban had fueled trade retaliation by China, where a rising quantity of U.S. poultry products are now being marketed and where U.S. meat exporters have been seeking expanded sales of their products. Meanwhile, China announced on September 14, 2009, that it was launching anti-dumping and anti-subsidies investigations regarding chicken meat (and automobile parts, after the United States imposed import safeguard tariffs on Chinese tires) produced in the United States, which Chinese manufacturers allege have harmed them domestically due to unfair competition. A Chinese ministry in early February 2010 released a preliminary ruling against U.S. poultry products, including anti-dumping penalties on individual U.S. companies ranging from 43.1% to 80.5%.

Date of Report: April 5, 2010
Number of Pages: 11
Order Number: R40706
Price: $29.95

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Tuesday, April 6, 2010

North Korea’s 2009 Nuclear Test: Containment, Monitoring, Implications

Jonathan Medalia
Specialist in Nuclear Weapons Policy

On May 25, 2009, North Korea announced that it had conducted its second underground nuclear test. Unlike its first test, in 2006, there is no public record that the second one released radioactive materials indicative of a nuclear explosion. How could North Korea have contained these 

As background, the Comprehensive Nuclear-Test-Ban Treaty (CTBT) would ban all nuclear explosions. It was opened for signature in 1996. Entry into force requires ratification by 44 states specified in the treaty, including the United States and North Korea. As of April 2010, 151 states, including 35 of the 44, had ratified. North Korea has not signed the CTBT. President Clinton signed it in 1996; in 1999, the Senate voted not to consent to its ratification. In 2009, President Obama pledged to press for its ratification. 

The treaty establishes a verification mechanism, including an International Monitoring System (IMS) to detect nuclear tests. Three IMS technologies detect waves that pass through the oceans (hydroacoustic), Earth (seismic), or atmosphere (infrasound); a fourth detects radioactive material from a nuclear test. Scientists concur that only the latter proves that an explosion was nuclear. Some believe that deep burial and other means can contain radioactive effluents. Another view is that containment is an art as much as a science. The United States learned to improve containment over several decades. Yet by one estimate, North Korea contained over 99.9% of the radioactive effluents from its 2009 test. It might have done so by application of lessons learned from its 2006 test or the U.S. nuclear test experience, use of a higher-yield device, release of material below the detection threshold, good luck, or some combination. Alternatively, the 2009 event may have been a nonnuclear explosion designed to simulate a nuclear test. 

Containment could be of value to North Korea. It could keep radioactive fallout from China, Japan, Russia, or South Korea, averting an irritant in relations with them. It could prevent intelligence services from gathering material that could reveal information about the weapon that was tested. It could permit North Korea to host nuclear tests by other nations, such as Iran; while such tests would be detected by seismic means, they could not be attributed to another nation using technical forensic means if effluents, especially particles, were contained. 

An issue for Congress is how containment could affect CTBT prospects. Supporters might argue that explosion-like seismic signals without detected radioactive material would lead to calls for an onsite inspection. Opponents might claim that only detection of radioactive material proves that a nuclear explosion occurred. Both would note that inspections could not be required unless the treaty entered into force, supporters to point to a benefit of the treaty and opponents to note that North Korea could block inspections by not ratifying the treaty. Congress may also wish to consider options to improve monitoring capability, such as supporting further research on test signatures, improving the capability of monitoring systems, and deploying more monitoring equipment. This report may be updated, especially if North Korea conducts another test. 

Related CRS reports include CRS Report RL34256, North Korea's Nuclear Weapons: Technical Issues, which summarizes open-source information on that nation's nuclear weapons program, including fissile material and warhead estimates, and assesses developments toward denuclearization; and CRS Report R40684, North Korea's Second Nuclear Test: Implications of U.N. Security Council Resolution 1874, which analyzes possible economic effects on North Korea of sanctions and vessel inspections that Resolution 1874 puts in place.

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Date of Report: April 2, 2010
Number of Pages: 37
Order Number: R41160
Price: $29.95

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