U.S.-China Relations: Policy Issues

Susan V. Lawrence
Analyst in Asian Affairs

Thomas Lum
Specialist in Asian Affairs

The 112th Congress faces important questions about what sort of relationship the United States should have with China and how the United States should respond to China’s “rise.” After 30 years of fast-paced economic growth, China’s economy is now the second largest in the world after the United States. China is driving global economic growth and has become an Asian economic hub. With economic success, China has developed significant global strategic clout. It is also engaged in an ambitious military modernization drive, including efforts to develop extended-range power projection capabilities and such advanced weapons as a stealth bomber. It continues to suppress all perceived challenges to the Communist Party’s monopoly on power.

In previous eras, the rise of new powers produced rivalry and conflict. Today, with low levels of “strategic trust” between the United States and China, some analysts believe eventual conflict between the two nations is inevitable. Others, like the Harvard historian Joseph S. Nye, Jr., have argued that, “The belief in the inevitability of conflict can become one of its main causes.” The Obama Administration has repeatedly assured China that the United States “welcomes a strong, prosperous and successful China that plays a greater role in world affairs,” and does not seek to prevent China’s re-emergence as a great power. It has wrestled, however, with how to engage China on issues affecting stability and security in the Asia-Pacific region, and how to persuade China to address economic policies the United States sees as denying a level playing field to U.S. firms trading with and operating in China. Such economic policies include China’s currency policy, its alleged discrimination against foreign firms in favor of domestic ones, and its weak protections for intellectual property rights. The Administration has also grappled with how best to press China on its human rights record and how to reconcile different approaches to addressing climate change. The two nations have cooperated to address global economic challenges and, with more mixed results, nuclear proliferation concerns related to Iran and North Korea.

The bilateral relationship was characterized by significant discord in 2010. For the United States, points of friction included China’s currency and industrial policies; its reluctance to condemn a series of North Korean provocations; its expansive claims to disputed territory in the South China Sea; and its ongoing suppression of domestic dissent. For China, points of friction included U.S. arms sales to Taiwan; President Obama’s meeting with Tibet’s exiled spiritual leader, the Dalai Lama; U.S. joint military exercises with South Korea in the Yellow Sea; and the U.S. declaration of a “national interest” in freedom of navigation in the South China Sea. China’s President and Communist Party General Secretary Hu Jintao made a state visit to the United States in January 2011, during which the two presidents issued a 41-point joint statement that sought to bridge differences and emphasize common interests. A major leadership transition in China in 2012 and a presidential election in Taiwan the same year could complicate future bilateral relations.

The first part of this report provides an overview of the U.S.-China relationship and Obama Administration policy toward China. A summary of major policy issues in the relationship follows, beginning with security issues and Taiwan, and continuing with economic issues, climate change and clean energy cooperation, and human rights. The report includes five appendices. Appendix A provides a chronology of meetings between the U.S. and Chinese presidents and information about select bilateral dialogues. Appendix B analyzes the Joint Statement issued during President Hu’s January 2011 state visit. Appendix C lists congressionally mandated annual reports related to China. Appendices D and E list China-related legislation introduced in the 112th and 111th Congresses. Throughout, this report directs the reader to other CRS reports for more detailed information about individual topics.


Date of Report: March 11, 2011
Number of Pages: 48
Order Number: R41108
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Japan 2011 Earthquake: U.S. Department of Defense (DOD) Response

Andrew Feickert
Specialist in Military Ground Forces

Emma Chanlett-Avery
Specialist in Asian Affairs

With almost 40,000 U.S. troops stationed in Japan, the March 11, 2011, earthquake and tsunami is unique in that U.S. forces and associated resources were located in close proximity to deal with the crisis. All Services—Army, Navy, Marine Corps, and Air Force—are present in Japan in various capacities. In addition, U.S. forces train regularly with their Japanese Self Defense Force (SDF) counterparts, including many humanitarian assistance and disaster relief exercises.

With over 100,000 SDF troops called up to respond to the disaster, U.S. forces were able to coordinate their efforts almost immediately to provide support for the Japanese responders. Within 8 days of the earthquake, the SDF had deployed 106,200 personnel, 200 rotary aircraft and 322 fixed-wings, and 60 ships. Nearly all of the Maritime SDF ships have been transferred to the affected area, and forces from the southernmost to the farthest north territories have been mobilized. As of March 19, the SDF had rescued 19,300 people and provided supplies on an ongoing basis to 300,000 displaced people, in addition to supporting activities at the troubled nuclear reactors.


Date of Report: March 22, 2011
Number of Pages: 11
Order Number: R41690
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Japan 2011 Disaster: CRS Experts

Ben Dolven
Section Research Manager

The following table provides access to names and contact information for CRS experts on policy concerns relating to the nuclear and humanitarian disaster unfolding in Japan. Policy areas identified include 

• Nuclear power, nuclear safety, and radioactive heath concerns; 
• Geology, earthquakes, and tsunamis; 
• U.S. relations with Japan; 
• U.S. government response to the disaster; and 
• Economic impacts of the crisis.

Date of Report: March 15, 2011
Number of Pages: 3
Order Number: R41692
Price: $19.95

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China and Proliferation of Weapons of Mass Destruction and Missiles: Policy Issues

Shirley A. Kan
Specialist in Asian Security Affairs

Congress has long been concerned about whether U.S. policy advances the national interest in reducing the role of the People’s Republic of China (PRC) in the proliferation of weapons of mass destruction (WMD) and missiles that could deliver them. Recipients of China’s technology reportedly include Pakistan and countries said by the State Department to have supported terrorism, such as Iran. This CRS Report, updated as warranted, discusses the security problem of China’s role in weapons proliferation and issues related to the U.S. policy response since the mid- 1990s. China has taken some steps to mollify U.S. and other foreign concerns about its role in weapons proliferation. Nonetheless, supplies from China have aggravated trends that result in ambiguous technical aid, more indigenous capabilities, longer-range missiles, and secondary (retransferred) proliferation. According to unclassified intelligence reports submitted as required to Congress, China has been a “key supplier” of technology, particularly PRC entities providing nuclear and missile-related technology to Pakistan and missile-related technology to Iran.

Policy approaches in seeking PRC cooperation have concerned summits, sanctions, and satellite exports. On November 21, 2000, the Clinton Administration agreed to waive missile proliferation sanctions, resume processing licenses to export satellites to China, and discuss an extension of the bilateral space launch agreement, in return for another PRC promise on missile nonproliferation. However, PRC proliferation activities have continued to raise questions about China’s commitment to nonproliferation and the need for U.S. sanctions. The Bush Administration imposed sanctions on 20 occasions on various PRC “entities” (including state-owned entities) for troublesome transfers related to missiles and chemical weapons to Pakistan, Iran, or perhaps another country, including repeated sanctions on some “serial proliferators.” Among those sanctions, in September 2001, the Administration imposed missile proliferation sanctions that effectively denied satellite exports, after a PRC company transferred technology to Pakistan, despite the promise of 2000. In September 2003, the State Department imposed additional sanctions on NORINCO, a defense industrial entity, effectively denying satellite exports to China. However, for six times, the State Department waived this sanction for the ban on imports of other PRC government products related to missiles, space systems, electronics, and military aircraft, and issued a permanent waiver in 2007. Since 2009, the Obama Administration has imposed sanctions on four occasions on PRC entities for missile or other weapon proliferation.

Skeptics question whether China’s cooperation in weapons nonproliferation warrants the U.S. pursuit of closer ties, even as sanctions were required against PRC technology transfers. Some criticize the imposition of U.S. sanctions targeting PRC “entities” but not the government. Others doubt the effectiveness of any stress on sanctions over diplomacy. Meanwhile, in 2002-2008, the U.S. approach relied on China’s influence on North Korea to dismantle its nuclear weapons. Beijing hosted the “Six-Party Talks” (last held in December 2008) with limited results. China’s approach evolved to vote for some U.N. Security Council (UNSC) sanctions against nuclear proliferation in North Korea and Iran. Some still called for engaging more with Beijing to use its leverage against Pyongyang and Tehran. However, North Korea’s second nuclear test in 2009 and military attacks against South Korea in 2010 prompted greater debate about the value of China’s roles. After much diplomacy, the PRC voted in June 2009 for UNSC Resolution 1874 to expand sanctions previously imposed under Resolution 1718 in 2006 against North Korea and voted in June 2010 for UNSC Resolution 1929 for the fourth set of sanctions against Iran. Also, concerns increased that China could capitalize in oil/gas deals in Iran as others enforce sanctions. Relevant legislation for Congressional oversight include U.S. sanctions against Iran (P.L. 111-195) and the FY2011 National Defense Authorization Act (P.L. 111-383) relating to nuclear security.


Date of Report: March 3, 2011
Number of Pages: 78
Order Number: RL31555
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Guam: U.S. Defense Deployments

Shirley A. Kan
Specialist in Asian Security Affairs

Since 2000, the U.S. military has been building up forward-deployed forces on the westernmost U.S. territory of Guam to increase U.S. presence, deterrence, and power projection for possible responses to crises and disasters, counterterrorism, and contingencies in support of South Korea, Japan, the Philippines, Taiwan, or elsewhere in Asia. Since 2006, three joint exercises based at Guam called “Valiant Shield” have boosted U.S. military readiness in the Asian-Pacific region. The defense buildup on Guam has been moderate. China still has concerns about Guam’s buildup, suspecting it to be directed against China. There has been concern that China and North Korea could target Guam with missiles. Still, Guam’s role increased in engaging China’s military.

In 2006, the United States and Japan agreed on a “Roadmap” to strengthen their alliance, including a buildup on Guam to cost $10.3 billion, with Japan contributing 60%. Primary goals were to start the related construction on Guam by 2010 and to complete relocation of about 8,000 marines from Okinawa to Guam by 2014. In Tokyo on February 17, 2009, the Secretary of State signed the bilateral “Agreement Between the Government of the United States of America and the Government of Japan Concerning the Implementation of the Relocation of the III Marine Expeditionary Force Personnel and Their Dependents From Okinawa to Guam” that reaffirmed the “Roadmap” of May 1, 2006. The two governments agreed that of the estimated $10.27 billion cost of the facilities and infrastructure development for the relocation, Japan will provide $6.09 billion, including up to $2.8 billion in direct cash contributions (in FY2008 dollars). The United States committed to fund $3.18 billion plus $1 billion for a road for a total of $4.18 billion.

However, completion of the marines’ relocation by 2014 seems unlikely. In September 2009, the Democratic Party of Japan (DPJ) became the ruling party. This political change raised uncertainty as Japan sought to re-negotiate the agreement, even while the United States sought its implementation. The dispute over the location on Okinawa of the Futenma Replacement Facility (FRF) to replace the Marine Corps Air Station Futenma raised implications for the relocation of marines from Okinawa to Guam. In January 2010, Japan promised to decide by May on the location of the FRF. Then, North Korea’s attack on South Korea’s naval ship Cheonan in March, and China’s deployment of its Navy near Okinawa which confronted Japan’s forces in April, catalyzed Japan to resolve the dispute in favor of stronger deterrence in alliance with the United States. On May 28, the Secretaries of Defense and State and their counterparts in Japan issued a “2+2” Joint Statement, in which they reaffirmed the 2006 Roadmap and the 2009 Agreement. In September 2010, the Navy and Army issued a Record of Decision that deferred some decisions for Guam. Nonetheless, despite the dispute over the FRF on Okinawa, Japan has funded in its defense budgets for direct contributions as well as loans for the marines’ relocation to Guam.

The National Defense Authorization Act (NDAA) for FY2010 (P.L. 111-84) authorized the first substantial incremental funding for the relocation of marines from Okinawa to Guam, but conditioned upon the Defense Department’s submission to Congress of a Guam Master Plan. Congress authorized a total amount (including for Defense-wide, Army, Navy, and Air Force) of almost $733 million. The NDAA for FY2011, P.L. 111-383, contained provisions related to realignment on Guam, after Congress expressed concern about insufficient information from the Defense Department (including on threats and a master plan for new construction). Updated as warranted, this CRS Report discusses major developments and policy issues. (On appropriations for military construction, see CRS Report R41345, Military Construction, Veterans Affairs, and Related Agencies: FY2011 Appropriations.)


Date of Report: February 18, 2011
Number of Pages: 14
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Taiwan: Major U.S. Arms Sales Since 1990

Shirley A. Kan
Specialist in Asian Security Affairs

This report, updated as warranted, discusses U.S. security assistance to Taiwan, or Republic of China (ROC), including policy issues for Congress and legislation. Congress has oversight of the Taiwan Relations Act (TRA), P.L. 96-8, which has governed arms sales to Taiwan since 1979, when the United States recognized the People’s Republic of China (PRC) instead of the ROC. Two other relevant parts of the “one China” policy are the August 17, 1982, U.S.-PRC Joint Communique and the “Six Assurances” to Taiwan. U.S. arms sales to Taiwan have been significant. The United States also expanded military ties with Taiwan after the PRC’s missile firings in 1995-1996. However, the U.S.-ROC Mutual Defense Treaty terminated in 1979.

At the last U.S.-Taiwan annual arms sales talks on April 24, 2001, President George W. Bush approved for possible sale diesel-electric submarines, P-3 anti-submarine warfare (ASW) aircraft (linked to the submarine sale), four decommissioned U.S. Kidd-class destroyers, and other items. Bush also deferred decisions on Aegis-equipped destroyers and other items, while denying other requests. Afterward, attention turned to Taiwan, where the military, civilian officials, and legislators from competing political parties debated contentious issues about how much to spend on defense and which U.S. weapons to acquire, despite the increasing threat (including a missile buildup) from the People’s Liberation Army (PLA). In 2003, the Bush Administration pointed Taiwan to three priorities for defense: command and control, missile defense, and ASW. The Pentagon also has broadened its concern from Taiwan’s arms purchases to its defense spending, seriousness in self-defense and protection of secrets, joint capabilities, operational readiness, critical infrastructure protection, and asymmetrical advantages. Blocked by the Kuomintang (KMT) party in the Legislative Yuan (LY) that opposed the Democratic Progressive Party (DPP)’s president (2000-2008), the Special Budget (not passed) for submarines, P-3C ASW aircraft, and PAC-3 missile defense systems was cut from $18 billion in 2004 to $9 billion (for submarines only) in 2005. In March 2006, Taiwan’s defense minister requested a 2006 Supplemental Defense Budget (not passed) in part for submarine procurement, P-3Cs, and PAC-2 upgrades (not new PAC-3 missiles). In June 2007, the LY passed Taiwan’s 2007 defense budget with funds for P-3C planes, PAC-2 upgrades, and F-16C/D fighters. In December 2007, the LY approved $62 million to start the sub design phase. After the KMT’s Ma Ying-jeou became President in May 2008, he resumed cross-strait talks while retaining the arms requests. But he has cut the defense budget.

Attention also turned to U.S. decisions on pending arms sales. In 2008, congressional concerns mounted about a suspected “freeze” in President Bush’s notifications to Congress on arms sales. On October 3, 2008, Bush finally notified Congress. However, he submitted six of the eight pending programs (not a “package”) for a combined value of $6.5 billion. Despite the concerns in 2008, President Obama repeated that cycle to wait to decide on submissions for congressional review all at one time (on January 29, 2010) five programs with a total value of $6.4 billion. Like Bush, President Obama did not notify the submarine design program (the only one pending from decisions in 2001) and has not accepted Taiwan’s formal request for F-16C/D fighters (pending since 2006). Legislation included National Defense Authorization Act (NDAA) for FY2010, P.L. 111-84; H.Res. 733 (Gingrey); H.Con.Res. 200 (Andrews); H.R. 4102 (Ros-Lehtinen); and H.Res. 927 (Barton). Moreover, Senators Cornyn, Inhofe, and Lieberman stressed to Defense Secretary Robert Gates the NDAA’s directive for an assessment of Taiwan’s air defense forces, including its F-16 fighters. Submitted in February 2010, an assessment found that Taiwan faced diminished ability to deny the PRC air superiority. On May 12, 136 Representatives sent President Obama a letter to urge a sale of new F-16 fighters. In contrast, Senators Feinstein and Specter spoke in June and September against such arms sales as irritants to Beijing.


Date of Report: February 24, 2011
Number of Pages: 71
Order Number: RL30957
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