This report summarizes the main findings in CRS Report RL32165, China's Currency: Economic Issues and Options for U.S. Trade Policy. Although China made modest reforms to its currency policy in 2005, resulting in a modest appreciation of its currency, many Members of Congress contend the reforms have not gone far enough and have warned of potential legislative action.

China’s economy remained relatively healthy in 2002, despite economic slowdowns in other parts of the world. Foreign investment continued to pour into China, and the Chinese government effectively used public spending to boost the economy. However, painful economic reforms will be necessary to keep the economic strong in 2003 and beyond. The recent outbreak in early 2003 of a very contagious virus called SevereAcuteRespiratory Syndrome (SARS) in China appears to have had a short-term negative impact on the Chinese economy.