This report examines the importance to the U.S. economy of China's investment in U.S. securities, as well as U.S. concerns over the possibility that China might unload a large share of those holdings, the likelihood that this would occur, and the potential implications such action could have for the U.S. economy. The report concludes that a large sell-off of Chinese Treasury securities holdings could negatively affect the U.S. economy, at least in the short-run. As a result, such a move could diminish U.S. demand for Chinese products and thus could lower China's economic growth as well.

This report provides background information and issues for Congress on maritime territorial and exclusive economic zone (EEZ) disputes in the East China (ECS) and South China Sea (SCS) involving China, with a focus on how these disputes may affect U.S. strategic and policy interests.