Search Penny Hill Press

Wednesday, March 30, 2011

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 112
th 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
Price: $29.95

Follow us on TWITTER at or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail
Penny Hill Press  or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.