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The U.S. trade deficit with China continues to grow but at a slower rate. A key reason for this is the boom in U.S. automotive and aerospace shipments to China. As China becomes more affluent and urbanized, ordinary Chinese are driving more cars and traveling more by frequently by air. China’s future demand, however, could be affected by pollution, traffic bottlenecks, and other factors. U.S. companies must also contend with China’s industrial policy, which tilts the playing field toward domestic industry. In the long run, technology transfer and off-shoring could erode U.S. competitiveness and take business away from U.S. plants.
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Revised March 22, 2014.
After the publication of this report on September 5, 2013, Microsoft brought to the authors’ attention new information about its partnership with Chinese company 21Vianet. The original version of the report inaccurately characterized certain aspects of the Microsoft-21Vianet partnership. A revised discussion of this partnership is provided on pages 32-34. The authors would like to thank Microsoft for their assistance in clarifying the details of 21Vianet’s Windows Azure service.
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This paper looks at China's foreign exchange reserves and holdings of U.S. Treasuries, and examines China’s efforts to diversify its investments
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In early 2014, a Chinese surface action group carried out a sophisticated training exercise spanning the South China Sea (SCS), eastern Indian Ocean, and Philippine Sea. The People’s Liberation Army (PLA) Navy used the 23-day deployment to improve operational proficiencies for antisubmarine warfare, air defense, electronic warfare, and expeditionary logistics; train to seize disputed islands and reefs in the SCS; enhance its ability to conduct integrated and multi-disciplinary operations; and demonstrate to the Indo-Pacific region that China’s combat reach now extends to the eastern Indian Ocean.
Research
USCC economic issue brief prepared by staff on China's petition last October to join the Trade in Services Agreement, a side agreement in the WTO that entered its sixth round of talks in late February.