In the months approaching China's resumption of sovereignty over Hong Kong on July 1, 1997, policy analysts are trying to assess how the territory will fare under Chinese rule. The answer is important to U.S. interests because of the enormous U.S. economic presence in Hong Kong; because any adverse developments in Hong Kong are likely to affect U.S.-China relations; and because China's promise to give Hong Kong a high degree of autonomy under the "one-China, two-systems" policy has major implications for Taiwan. But given the political situation, the American ability to affect the course of events in Hong Kong seems marginal unless the U.S. decides to confront Beijing more directly. Developments in U.S.-China relations in 1994-1995 suggest Washington might be hesitant to do so.

This report discusses President Obama's visit to China, in November-10-12. The purpose of the visit was focused on increasing cooperation on global and regional challenges such as climate change, global economic governance, non-proliferation, and pandemic diseases like Ebola; improving the military-to-military relationship; and expanding business and people-to-people ties.

Over the past several years, China has enjoyed one of the world's fastest growing economies and has been a major contributor to world economic growth. However, the current global financial crisis threatens to slow China's economy. China is a major economic power and holds huge amounts of foreign exchange reserves, and thus it could play a major role in responding to the current crisis. For example, in an effort to help stabilize the U.S. economy, China might boost its holdings of U.S. Treasury securities, which would help fund the Federal Government's purchases of troubled U.S. assets. However, this could raise a number of issues and concerns for U.S. policymakers.

China is a major source of U.S. imports of consumer products (such as toys) and an increasingly important supplier of various food products. Reports of unsafe seafood, pet food, toys, tires, and other products imported from China over the past year or so have raised concern in the United States over the health, safety, and quality of imported Chinese products. This report provides an overview of this issue and implications for U.S.-China trade relations.