Highlights of This Month’s Edition • Bilateral trade: In January 2018, the U.S. goods deficit with China grew 14.8 percent year-on-year to reach $36 billion—its highest ever for January and its highest monthly level since September 2015. • Bilateral policy issues: The U.S. Department of Commerce submits its Section 232 recommendations for tariffs or quotas on U.S. steel and aluminum imports; SEC blocks acquisition of Chicago Stock Exchange by Chinese-led investor group based on concerns over transparency, oversight, and compliance with ownership limits; AmCham and USCBC surveys of U.S. businesses in China find some signs of rising optimism due to increasing profits and confidence in China’s economic growth, but regulatory and market access challenges persist as firms feel increasingly unwelcome in Chinese markets. • Policy trends in China’s economy: In their continuing battle against financial risks, Chinese regulators maintain focus on shadow banking, issuing a series of measures to curb riskier forms of lending. • Sector focus – Sorghum and Soybeans: In response to defensive U.S. trade measures, China considers duties against U.S. sorghum and soybeans, putting 67 percent of U.S. agricultural exports to China at risk.
This hearing will compare and contrast U.S. and Chinese pursuit of next generation connected devices and networks and the implications for U.S. economic competitiveness and national security. The hearing will focus on U.S. and Chinese 5th generation wireless technology (5G) and Internet of Things standards and technology development, U.S. usage of Chinese Internet of Things technologies and 5G networks, and the ability of Chinese firms to collect and utilize data from U.S. consumers through Internet of Things technologies.
The Commission’s February hearing on “China’s Military Reforms and Modernization: Implications for the United States” will provide insight into how China’s ongoing military reform efforts and President Xi’s vision for achieving the “China Dream” are shaping PLA long-term defense planning, weapons development, and acquisition programs. The hearing will specifically assess the political and security drivers shaping China’s military modernization efforts; the reformed Central Military Commission’s role in coordinating modernization priorities with the military services; the development of forces capable of conducting joint operations; and implications for the United States.
Highlights of This Month’s Edition • Bilateral trade: In 2017, the U.S. goods trade deficit with China climbed 8.1 percent on the previous year to $375.2 billion, the highest deficit on record; U.S. services exports to China grow at the slowest rate since 2009 due to a slowdown in tourism to the United States. • Bilateral policy issues: The Office of the U.S. Trade Representative’s 2017 report on China’s adherence to WTO commitments criticizes China’s noncompliance, noting “it is now clear that the WTO rules are not sufficient to constrain China’s market-distorting behavior.” • Quarterly review of China’s economy: China’s economy grew 6.9 percent year-on-year in 2017, driven by greater domestic consumption, higher industrial output, and global demand. • Policy trends in China’s economy: The Chinese government takes steps to discourage bitcoin mining in its latest crackdown on the cryptocurrency; China’s central bank adjusts exchange rate management regime. • Sector focus – Chinese Outbound Investment: Chinese investment into the United States drops 35 percent following China’s imposition of capital control measures; newly announced Chinese investment deals in the United States are 90 percent lower in 2017 than 2016; concerns over espionage activity, opaque ownership structures, and a lack of privacy protections for U.S. customers cause HNA and Ant Financial’s U.S. acquisition transactions to flounder and terminate Huawei’s mobile phone partnerships with U.S. carriers.
Highlights of This Month’s Edition • Bilateral trade: The U.S. trade deficit in goods with China totaled $35.4 billion in November 2017, its highest monthly level in the past two years and a 16.2 percent increase year-on-year. • Bilateral policy issues: President Trump issues National Security Strategy calling for more assertive policies to combat Chinese influence campaigns and economic coercion; the U.S. government is pursuing multilateral and bilateral approaches to confront China’s market-distorting support for sectors such as steel and aluminum. • Policy trends in China’s economy: At the Central Economic Work Conference, Chinese leaders maintain last year’s focus on financial risks and supply-side structural reform but place less emphasis on deleveraging; IMF cites China’s credit growth, regulation, and implicit credit guarantees from banks and government actors as top concerns in its most recent financial system stability report. • Sector focus – Consumer Goods: U.S. consumer goods exports to China experience consistent growth from 2003 to 2016 despite accounting for a small portion of U.S. exports to China; on December 1, the Chinese government cut tariffs on several products, including top U.S. consumer good exports.



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