U.S.-China economic ties have expanded substantially over the past several years. China is now the third largest U.S. trading partner, its second largest source of imports, and its fourth largest export market. However, U.S.-China commercial ties have been strained by a number of issues, including a surging U.S. trade deficit with China, China's refusal to float its currency, and failure to fully comply with its World Trade Organization (WTO) commitments, especially its failure to provide protection for U.S. intellectual property rights (IPR). This report explores these issues in detail, especially concerning the lack of protection for U.S. IPR.

This report provides a quantitative framework for policy considerations dealing with U.S. trade with China. It provides basic data and analysis of China’s international trade with the United States and other countries. Since Chinese data differ considerably from those of its trading partners (because of how entrepot trade through Hong Kong is counted), data from both PRC sources and those of its trading partners are presented. Charts showing import trends by sector for the United States highlight China’s growing market shares in many industries and also show import shares for Japan, Canada, Mexico, the European Union, and the Association for Southeast Asian Nations (ASEAN ).

This report explores various aspects of the Chinese economy, including specific policies that some Members of Congress consider a form of currency manipulation, the U.S.-China economic relationship, and the state of the Chinese economy with respect to the current global economic crisis.

China’s economy continues to be a concern to U.S. policymakers. On the one hand, China’s economic growth presents huge opportunities for U.S. exporters. On the other hand, the surge in Chinese exports to the United States has put competitive pressures on many U.S. industries. Many U.S. policymakers have argued that greater efforts should be made to pressure China to fully implement its WTO commitments and to change various economic policies deemed harmful to U.S. economic interests, such as its currency peg and its use of subsidies to support its SOEs. In addition, recent bids by Chinese state-owned firms to purchase various U.S. firms have raised concerns among Members over the impact such acquisitions could have on U.S. national and economic security.

In recent years, the United States and other countries have expressed considerable concern that China’s national currency (the yuan or renminbi) is seriously undervalued. Some analysts say the yuan needs to rise by as much as 40% in order to reflect its equilibrium value. Critics say that China’s undervalued currency provides it with an unfair trade advantage that has seriously injured the manufacturing sector in the United States. Chinese officials counter that they have not pegged the yuan to the dollar in order to gain trade advantages. Rather, they say the fixed rate promotes economic stability that is vital for the functioning of its domestic economy.

The National Museum of the Pacific War presents an oral interview with Al Stevens. He graduated from Michigan State University in 1943 as a metallurgical engineer. He enlisted in the Navy in 1944 in Detroit, Michigan. He attended the Navy Electronics School at Harvard University as well as a specialized radar training program organized by MIT at the Harbor Building in Boston, Massachusetts. He received further training in radar countermeasures at Ocracoke Island, North Carolina. He served on the USS Wasatch (ACG-9). When the ship was anchored, he was assigned to deliver orders and mail. He describes the Operation Olympic portion of the plan to invade Japan. He was part of the force that occupied Wakanoura and Nagoya, Japan. He shares an anecdote about obtaining a Japanese sword as a souvenir in Nagoya. In North China he participated in the repatriation of the Japanese, Chinese, and Koreans. He wrote a book, ?Up Close and Personal,? about his World War II experiences.

The National Museum of the Pacific War presents an oral interview with Al Stevens. He graduated from Michigan State University in 1943 as a metallurgical engineer. He enlisted in the Navy in 1944 in Detroit, Michigan. He attended the Navy Electronics School at Harvard University as well as a specialized radar training program organized by MIT at the Harbor Building in Boston, Massachusetts. He received further training in radar countermeasures at Ocracoke Island, North Carolina. He served on the USS Wasatch (ACG-9). When the ship was anchored, he was assigned to deliver orders and mail. He describes the Operation Olympic portion of the plan to invade Japan. He was part of the force that occupied Wakanoura and Nagoya, Japan. He shares an anecdote about obtaining a Japanese sword as a souvenir in Nagoya. In North China he participated in the repatriation of the Japanese, Chinese, and Koreans. He wrote a book, ?Up Close and Personal,? about his World War II experiences.