2011 American Business in China White Paper

AmCham China proudly releases the Business in China White Paper: an actionable framework to help both the US and Chinese governments ensure.
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The White Paper also serves as a year-on-year assessment of the progress made on policies and regulations and is a key platform for discussion and engagement with the Chinese and US government. The White Paper also includes an annual Recommendation Scorecard measuring progress in a wide range of policy areas. The White Paper found the most significant progress in electronic payment services, customs, medical devices, standards, certification and conformity assessments, and visa policy.

Meanwhile, several areas, including agriculture, tax policy, competition law, and legal services, saw low progress. Further, the survey is a useful tool for AmCham members to measure their operations and compare their business outlooks and strategies with the broader community. Additionally, the BCS report includes recommendations for businesses and policymakers. The report concluded that "A top priority for both Chinese and US policymakers should be the pursuit of a high standard US-China BIT to improve the ability of US companies to invest and innovate in China on an even playing field to the benefit of China's future economy.

Business Now is AmCham China's flagship publication, released both online and in print eight times annually. The magazine provides insights on the US-China business environment, penned by chamber members, in-house policy analysts and staffers. Each issue includes such features as a cover story addressing a current issue , a report on policy changes and their implications for business , member commentaries , book reviews and in-depth interviews with senior business leaders.

The three chapters are headed by Chapter Executive Committees that cater specifically to regional members. AmCham China is involved in an expansive range of programs and services. Its signature activities help members succeed in China by providing government advocacy, a wide range of networking opportunities, valuable information and intelligence, and comprehensive business support services. Over 40 industry- and issues-specific working groups at AmCham China are driven by the interests and needs of member companies.

They provide exposure, create bridges, and facilitate information exchange in specialized business areas. Its flagship publication is a quarterly magazine called Partnership. It is a multi-sector initiative to strengthen the healthcare system and ongoing US-China collaboration in this critical field. Its focus is information-sharing, collaboration, and policy recommendations for US-China high-tech trade. Although US Embassy officials ultimately decide whether or not applicants secure visas to the United States, this service speeds up the process.

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The AmCham China Business Center was launched in as a one-stop resource for people considering doing business in China. It offers a news bureau, industry reports, and business analysis pertinent to specific sectors. A service directory enables research into potential partners. Visitors to the website can also ask questions to a long-time business expert affiliated with AmCham China.

Mao Zedong established the People's Republic of China in mainland China, while Taiwan and other islands are still regarded by China as being under the Republic of China rule to this day, although Taiwan considers itself to be independent. Since then, the ROC has often been referred to as 'Taiwan' to avoid confusion. Trade continued and the U.

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Instead, the US maintained diplomatic relations with the Republic of China government on Taiwan, recognizing it as the sole legitimate government of China. An enemy of the Chiang family, K. Wu , was removed from his position as governor of Taiwan by Chiang Ching-kuo and fled to America in Chiang placed Sun under house arrest in Chiang Ching-kuo , educated in the Soviet Union, initiated Soviet-style military organization in the Republic of China military, reorganizing and Sovietizing the political officer corps and surveillance.

Kuomintang party activities were propagated throughout the military. Sun Li-jen opposed this action. As the People's Liberation Army moved south to complete the conquest of mainland China in , the American embassy followed Chiang Kai-shek's Republic of China government to Taipei , while US consular officials remained in mainland China. However, the People's Republic of China was hostile to the American presence, and all US personnel were withdrawn from the mainland in early Truman administration announced on January 5, , that the United States would not become involved in any dispute about Taiwan Strait, and that he would not intervene in the event of an attack by the PRC, [57] but these plans were quickly undone when the Korean War began on 25 June with the invasion of the US-backed Republic of Korea by the communist Democratic People's Republic of Korea.

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The resolution was adopted mainly because the Soviet Union, a veto-wielding power , had been boycotting UN proceedings since January, in protest that the Republic of China and not the People's Republic of China held a permanent seat on the council. Chinese warnings for the UN forces to not venture too close to their border were ignored, and in November , a massive Chinese counterattack was launched. The Chinese army struck in the west along the Chongchon River and completely overran several South Korean divisions, successfully landing a heavy blow to the flank of the remaining forces.

The defeat of the US Eighth Army resulted in the longest retreat of any American military unit in history. Both sides sustained heavy casualties before the allied forces were able to push Chinese forces back, near the original division. In late March , after the Chinese army had moved large numbers of new forces near the Korean border, US bomb loading pits at Kadena Air Base in Okinawa were made operational. On April 5, the US Joint Chiefs of Staff released orders for immediate retaliatory attacks using nuclear weapons against Manchurian bases to prevent new Chinese troops from entering the battles or bombing attacks originating from those bases.

On the same day, Truman gave his approval for transfer of nine Mark IV nuclear capsules "to the Air Force's Ninth Bomb Group , the designated carrier of the weapons," [ This quote needs a citation ] signing an order to use them against Chinese and Korean targets. Since then, a divided Korea has become an important factor in US-China relations. The People's Republic of China provided resources and training to North Vietnam, and in the summer of , Chairman Mao Zedong agreed to supply Hanoi with 90, rifles and guns free of charge. After the launch of the America's Operation "Rolling Thunder", China sent anti-aircraft units and engineering battalions to North Vietnam to repair the damage caused by American bombing, rebuild roads and railroads, and perform other engineering work, freeing additional hundreds of thousands North Vietnamese army units for combat in American supported South Vietnam.

The United States lost 58, troops in the Vietnam War. The Chinese presence in North Vietnam was well-known to US officials, and can explain a number of factors surrounding American strategy in the conflict. However, it is unclear exactly what Beijing's reaction to a US invasion of North Vietnam would have been—Mao Zedong reportedly told journalist Edgar Snow in that China had no intention of fighting to save the Hanoi regime and would not engage the US military unless it crossed into Chinese territory.


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Whatever Chinese plans might have been, the Johnson Administration was unwilling to tempt fate and so ground troops never crossed into North Vietnam. Johnson considered preemptive attacks to halt its nuclear program. He ultimately decided the measure carried too much risk and it was abandoned. For most of the 22 years between and , Sino-US relations were uniformly hostile, with Mao Zedong frequently referring to the United States as "the most dangerous imperialist power", [ This quote needs a citation ] and the U.

President Kennedy believed that US policy towards China was "nonsensical", [ This quote needs a citation ] and he considered reestablishing diplomatic ties in his second term. Despite this official non-recognition, the United States and the People's Republic of China held meetings at the ambassadorial level beginning in and continuing until , first in Geneva and in — in Warsaw.

The Cultural Revolution brought about near-complete isolation of China from the outside world and vocal denunciations of both U. Beginning in , the Foreign Claims Settlement Commission established the China Claims Program, in which American citizens could denominate the sum total of their lost assets and property following the Communist seizure of foreign property in American companies were reluctant to invest in China despite future Chairman Deng Xiaoping's reassurances of a stable business environment.

The end of the s brought a period of transformation. For China, when American president Johnson decided to wind down the Vietnam war in , it gave China an impression that the US had no interest of expanding in Asia anymore while the USSR became a more serious threat as it intervened in Czechoslovakia to displace a communist government and might well interfere in China.

This became an especially important concern for the People's Republic of China after the Sino-Soviet border conflict of The PRC was diplomatically isolated and the leadership came to believe that improved relations with the United States would be a useful counterbalance to the Soviet threat. Zhou Enlai , the Premier of China , was at the forefront of this effort with the committed backing of Chairman Mao Zedong.

In , the United States initiated measures to relax trade restrictions and other impediments to bilateral contact, to which China responded. However, this rapprochement process was stalled by the Vietnam War where China was supporting the enemies of the United States. Communication between Chinese and American leaders, however, was conducted with Pakistan and Poland as intermediaries.

In the United States, academics such as John K. Doak Barnett pointed to the need to deal realistically with the Beijing government, while organizations such as the National Committee on United States—China Relations sponsored debates to promote public awareness. Many saw the specter of Communist China behind communist movements in Vietnam , Cambodia , and Laos , but a growing number concluded that if the PRC would align with the US it would mean a major redistribution of global power against the Soviets.

Mainland China's market of nearly one billion consumers appealed to American business. Nixon mentioned in his inaugural address that the two countries were entering an era of negotiation after an era of confrontation. Although Nixon during his presidential campaign had vociferously supported Chiang Kai-Shek, by the second half of the decade, he increasingly began to speak of there "being no reason to leave China angry and isolated". Nixon's election as president in was initially met with hostility by Beijing—an editorial in the People's Daily denounced him as "a chieftain whom the capitalist world had turned to out of desperation".

Domestic politics also entered into Nixon's thinking, as the boost from a successful courting of the PRC could help him in the American presidential election. He also worried that one of the Democrats would preempt him and go to the PRC before he had the opportunity.

In , an unexpectedly friendly encounter between the American and Chinese ping-pong athletes called Glenn Cowan and Zhuang Zedong in Japan opened the way for a visit to China, which Chairman Mao personally approved. The smooth acceptance of this so-called " ping-pong diplomacy " gave confidence to both sides. In July , Henry Kissinger feigned illness while on a trip to Pakistan and did not appear in public for a day. He was actually on a top-secret mission to Beijing to negotiate with Zhou Enlai. Kissinger and his aides did not receive a warm welcome in Beijing, and the hotel they stayed in was equipped with pamphlets excoriating US imperialism.

However, the meeting with Zhou Enlai was productive, and the Chinese premier expressed his hope for improved Sino-US relations. He commented that the US had intentionally isolated China, not vice versa, and any initiative to restore diplomatic ties had to come from the American side.

Zhou spoke of the late President Kennedy's plans to restore relations with China and told Kissinger "We are willing to wait as long as we need to. If these negotiations fail, in time another Kennedy or another Nixon will come along. This announcement [68] caused immediate shock around the world. In the United States, some hard-line anti-communists most notably Arizona Senator Barry Goldwater denounced the decision, but most public opinion supported the move and Nixon saw the jump in the polls he had been hoping for.

Since Nixon had sterling anti-communist credentials he was all but immune to being called "soft on communism. Within the PRC there was also opposition from left-wing elements. This effort was allegedly led by Lin Biao , head of the military, who died in a mysterious plane crash over Mongolia while trying to defect to the Soviet Union. His death silenced most internal dissent over the visit. Romania's president Nicolai Ceausescu praised the US initiative as a "move for world peace".

America's European allies and Canada were pleased by the initiative, especially since many of them had already recognized the PRC. In Asia , the reaction was far more mixed. Japan was annoyed that it had not been told of the announcement until fifteen minutes before it had been made, and feared that the Americans were abandoning them in favor of the PRC.

A short time later, Japan also recognized the PRC and committed to substantial trade with the continental power. South Korea and South Vietnam were both concerned that peace between the United States and the PRC could mean an end to American support for them against their communist enemies. Throughout the period of rapprochement, both countries had to be regularly assured that they would not be abandoned.

This did not lead to immediate recognition of the People's Republic of China but 'liaison offices' were established in Beijing and Washington. Also, the US and China both agreed to take action against 'any country' that is to establish 'hegemony' in the Asia-Pacific. On several issues, such as the ongoing conflicts in Korea, Vietnam, and Israel, the US and China were unable to reach a common understanding. Most major anti-US propaganda disappeared in China after the Nixon visit.

Although there was still occasional criticism of US imperialism, the Soviet Union had definitively become China's arch-foe in the s. It has been argued that the United States, on the other hand, saw fewer benefits than it had hoped for, inasmuch as China continued to back America's enemies in Hanoi and Pyongyang. The economic benefits of normalization were slow as it would take decades for American products to penetrate the vast Chinese market.

While Nixon's China policy is regarded by many as the highlight of his presidency, others such as William Bundy have argued that it provided very little benefit to the United States. In to , such distinguished Americans as David K. Bruce , George H. Bush , Thomas S. China made clear that it considered the Soviet Union its chief adversary, and urged the United States to be powerful, thereby distracting Moscow. Liaison officer George Bush concluded, "China keeps wanting us to be strong, wanting us to defend Europe, wanting us to increase our defense budgets, etc.

Although Brzezinski sought to quickly establish a security relationship with Beijing to counter the Soviet Union, Carter sided with Vance in believing that such a deal would threaten existing U. Thus, the administration decided to cautiously pursue political normalization and not military relations.

The United States and the People's Republic of China announced on December 15, that the two governments would establish diplomatic relations on January 1, Much like the Nixon visit to Beijing six years earlier, the formal establishment of Sino-US ties met with a mixed response from many countries. Taiwan, although fully expecting this step, nonetheless expressed disappointment at having not been consulted first.

The reaction of the communist world was similar to , with the Soviet Union and its allies in Eastern Europe mostly being noncommittal, Romania welcoming the move, and Cuba and Albania being strongly against it. North Korea issued a statement congratulating "our brotherly neighbors for ending long-hostile relations with the US". Vice Premier Deng Xiaoping 's January visit to Washington initiated a series of important, high-level exchanges which continued until the spring of This resulted in many bilateral agreements, especially in the fields of scientific, technological, and cultural interchange, as well as trade relations.

Since early , the United States and the PRC have initiated hundreds of joint research projects and cooperative programs under the Agreement on Cooperation in Science and Technology, the largest bilateral program. On March 1, , the two countries formally established embassies in each other's capitals. In , outstanding private claims were resolved and a bilateral trade agreement was completed. This visit led to agreements in September on maritime affairs, civil aviation links, and textile matters, as well as a bilateral consular convention.

Sino-US military cooperation also began in American arms sales to China were initiated, and in it was revealed that a joint Sino-US listening post had been operated in Xinjiang, near the Soviet border. Chinese demands for advanced technology from the US were not always met, in part due to opposition from Congressmen who either distrusted technology transfer to a communist nation out of principle, or concern that there was no guarantee that such technology would not end up in the hands of unfriendly third parties.

In , the US State Department changed its classification of China to "a friendly, developing nation", [ This quote needs a citation ] thereby increasing the amount of technology and armaments that could be sold. The skepticism of some US Congressmen was not entirely unmerited as China during the s continued to sell arms to Iran and other states that were openly hostile to American interests. As a consequence of high-level and working-level contacts initiated in , New York City and Beijing become sister cities, US dialogue with the PRC broadened to cover a wide range of issues, including global and regional strategic problems, political-military questions, including arms control, UN, and other multilateral organization affairs, and international narcotics matters.

High-level exchanges continued to be a significant means for developing US-PRC relations in the s. Reagan's visit to Beijing went well, however a speech he made criticizing the Soviet Union and praising capitalism, democracy, and freedom of religion was not aired on Chinese state TV.

Further exchanges of cabinet-level officials occurred between and , capped by President Bush's visit to Beijing in February Shortly after being elected president in , Ronald Reagan made a speech criticizing the PRC and welcoming restoration of ties with Taiwan. These remarks aroused initial panic in Beijing, but Reagan's advisers quickly apologized for his comments, and the president-elect soon retracted them.

Reagan's first two years in office saw some deterioration in Sino-US relations due to the president's vociferous anti-communism, as well as the inability of the two nations to come to a common understanding over the Korean standoff, the Israel-Palestine conflict, or the Falkland War. In the period before the Tiananmen Square protests of , a growing number of cultural exchange activities gave the American and Chinese peoples broad exposure to each other's cultural, artistic, and educational achievements.

Numerous mainland Chinese professional and official delegations visited the United States each month. Many of these exchanges continued after the suppression of the Tiananmen protests. Since the renewal of Sino-American relations in early , the Taiwan issue remained a major source of contention. The expanding relationship that followed normalization was threatened in by PRC objections to the level of US arms sales to the Republic of China on Taiwan. Secretary of State Alexander Haig visited China in June in an effort to resolve Chinese concerns about America's unofficial relations with Taiwan.

Following China's violent suppression of political protests in June , the US and other governments enacted a number of measures against China's violation of human rights. The US also imposed a number of economic sanctions. In the summer of , at the G7 Houston summit , the West called for renewed political and economic reforms in mainland China, particularly in the field of human rights.

Tiananmen event disrupted the US-China trade relationship, and US investors' interest in mainland China dropped dramatically. Tourist traffic fell off sharply. After Tiananmen Square, Sino-US relations deteriorated sharply, falling to their worst since the s, with Beijing accusing the US of "a decades-long conspiracy to subvert Chinese socialism".

Nonetheless, China continued to seek foreign business and investment. Sino-US military ties and arms sales were abruptly terminated in and as of have never been restored. In , the PRC conducted military exercises in the Taiwan Strait in an apparent effort to intimidate the Republic of China electorate before the pending presidential elections , triggering the Third Taiwan Strait Crisis. The United States dispatched two aircraft carrier battle groups to the region.

Subsequently, tensions in the Taiwan Strait diminished and relations between the US and the PRC improved, with increased high-level exchanges and progress on numerous bilateral issues, including human rights, nuclear proliferation , and trade. In connection with that visit, the two sides came to a consensus on implementation of their agreement on Peaceful Nuclear Cooperation, as well as a number of other issues. He traveled extensively in mainland China, and had direct interaction with the Chinese people, including live speeches and a radio show which allowed the President to convey a sense of American ideals and values.

President Clinton was criticized by some, however, for failing to pay adequate attention to human rights abuses in mainland China. Relations were damaged for a time by the United States bombing of the Chinese embassy in Belgrade in May , which was stated by the White House to be miscoordination between intelligence and the military, although which some Chinese believed to be deliberate. In any case, Beijing for several days was rocked by massive anti-US demonstrations. By the end of , relations began to gradually improve.

In October , the two countries reached an agreement on compensation for families of those who were victims, as well as payments for damages to respective diplomatic properties in Belgrade and China. The crew were detained by the PLA after destroying all classified documents pertaining to the aircraft's operation. It was widely believed that the EP-3 recon aircraft was conducting a spying mission on the PLA before the collision, which however took place over international waters. Following extensive negotiations resulting in the "letter of the two sorries," the crew of the EP-3 was released from imprisonment and allowed to leave the PRC eleven days later.

The US aircraft was returned by Beijing three months later in pieces, after which the relationship between the US and the PRC gradually improved once more. Sino—American relations improved following the September 11 terrorist attacks. The third round of that dialogue was held in Beijing in February In the United States, the terrorist attacks greatly changed the nature of discourse. It was no longer plausible to argue, as the Blue Team had earlier asserted, that the PRC was the primary security threat to the United States, and the need to focus on the Middle East and the War on Terror made the avoidance of potential distractions in East Asia a priority for the United States.

Because of setbacks in America's Iraq campaign, these fears have largely subsided. The application of American power in Iraq and continuing efforts by the United States to cooperate with the PRC has significantly reduced the popular anti-Americanism that had developed in the mids. The PRC and the US have also worked closely on regional issues, including those pertaining to North Korea and its nuclear weapons program.

American Chamber of Commerce in the People's Republic of China

The People's Republic of China has stressed its opposition to North Korea's decision to withdraw from the Treaty on the Non-Proliferation of Nuclear Weapons , its concerns over North Korea's nuclear capabilities, and its desire for a non-nuclear Korean Peninsula. Taiwan remains a volatile issue, but one that remains under control. In , Taiwan voters elected Ma Ying-jeou. Ma, representing the Kuomintang, campaigned on a platform that included rapprochement with mainland China. His election has significant implications for the future of cross-strait relations.

Ambassador to China from to examined "The State of U. Obama expressed concern that the value of China's currency was being deliberately set low to benefit China's exporters. McCain argued that free trade was crucial and was having a transformative effect in China. Barack Obama's presidency has fostered hopes for increased co-operation and heightened levels of friendship between the two nations.

On November 8, , Hu Jintao and Barack Obama shared a phone conversation in which the Chinese President congratulated Obama on his election victory. During the conversation both parties agreed that the development of US-China relations is not only in the interest of both nations, but also in the interests of the world. Other organizations within China also held positive reactions to the election of Barack Obama, particularly with his commitment to revising American climate change policy. Greenpeace published an article detailing how Obama's victory would spell positive change for investment in the green jobs sector as part of a response to the financial crisis gripping the world at the time of Obama's inauguration.

Both US and Chinese governments have addressed the economic downturn with massive stimulus initiatives. The Chinese have expressed concern that "Buy American" components of the US plan discriminate against foreign producers, including those in China. As the two most influential and powerful countries in the world, there have been increasingly strong suggestions within American political circles of creating a G-2 Chimerica relationship for the United States and China to work out solutions to global problems together. Now called the U. The focus of the first set of meetings in July was in response to the economic crisis, finding ways to cooperate to stem global warming and addressing issues such as the proliferation of nuclear weapons and humanitarian crises.

US President Barack Obama visited China on November 15—18, to discuss economic worries, concerns over nuclear weapon proliferation, and the need for action against climate change. In response, the PRC threatened to impose sanctions on US companies supplying arms to Taiwan and suspend cooperation on certain regional and international issues.

In , the PRC criticized Obama's new defense strategy, which was widely viewed [ by whom?


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In March , China suddenly began cutting back its purchases of oil from Iran , along with some signs on sensitive security issues like Syria and North Korea , showed some coordination with the Obama administration. Such accord might signal a new level of cooperation between the US and China. In an effort to build a "new model" of relations, President Obama met President Xi Jinping for two days of meetings, between 6 June and 8 June , at the Sunnylands estate in Rancho Mirage , California.

Xi was dismissive of American complaints about cyber security. National Security Adviser , stated that cyber security "is now at the center of the relationship," adding that if China's leaders were unaware of this fact, they know now. Relations between the military leadership of the two nations improved in General Qi said that over the long term the shared interests of the two would outweigh their differences. Obama has supported the One-China policy.

We are not in favor of independence. In May , U. Under Obama, America conducted freedom of navigation patrols in the South China Sea region to underscore the US' position that the artificial islands constructed by China are located in international waters. Beginning during the election campaign , Donald Trump threatened to classify China as a " currency manipulator " as part of a potential trade war.

On Donald Trump's inauguration day , an official from the People's Liberation Army wrote on the official website that the US's military build-up in Asia, and its push to arm South Korea with the THAAD missile-defense system were provocative "hot spots getting closer to ignition" and that the chances of war had become "more real". On 23 January, speaking about China's claims to sovereignty over the Spratly Islands in the South China Sea , White House spokesman Sean Spicer said, "It's a question of if those islands are in fact in international waters and not part of China proper, then yeah, we're going to make sure that we defend international territories from being taken over by one country.

On 4 January, on a visit to Japan , U.

2013 American Business in China White Paper

On 9 February, Trump spoke with China's leader Xi Jinping over the phone discussing a wide range of issues; Trump was said to have re-iterated the United States' commitment to the status quo 'one-China' policy. President Xi Jinping reiterated before President Trump, in a telephone conversation held between the two men on 3 July , that "China-US relations have made great progress in recent days, but they have also been affected by some negative factors.

It has violated Chinese and international law, infringed upon Chinese sovereignty, and disrupted order, peace and security of the relevant waters and put in jeopardy facilities and personnel on the relevant Chinese islands. It is a serious political and military provocation. The Chinese side is strongly dissatisfied with and firmly opposed to the relevant actions by the US. The main theme of the meeting emphasized the issues regarding the de-nucleariziation on the Korean peninsula in addition to the stabilization of China—United States relations.

President Trump reiterated the importance of trade development between the two countries and reaffirmed the American support for the One-China policy. National Security Act from 18 December , the ships of U. Navy can call at the ports of Taiwan. This fact breaks "One-China" law, consider the Chinese government. The news comes amid increasing tensions between the United States and China. The ships are based at the US naval port in Yokosuka, south of Tokyo.

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In , the US levied tariffs on certain Chinese goods. Since President Trump's announcement of his government's willingness to engage China in a trade war, China's state currency, the Renminbi , had dropped 9 percent against the dollar between mid-April and mid-August Direct investment by the US in mainland China covers a wide range of manufacturing sectors, several large hotel projects, restaurant chains, and petrochemicals.

US companies have entered agreements establishing more than 20, equity joint ventures , contractual joint ventures, and wholly foreign-owned enterprises in mainland China. More than US-based multinationals have projects in mainland China, some with multiple investments. Beginning in , the US and China agreed to hold regular high-level talks about economic issues and other mutual concerns by establishing the Strategic Economic Dialogue , which meets biannually.

Five meetings have been held, the most recent in December Economic nationalism seems to be rising in both countries, a point the leaders of the two delegations noted in their opening presentations. In September a trade dispute emerged between China and the United States, which came after the US imposed tariffs of 35 percent on Chinese tire imports. The Chinese commerce minister accused the United States of a "grave act of trade protectionism ," [] while a USTR spokesperson said the tariff "was taken precisely in accordance with the law and our international trade agreements.

When a country joins the World Trade Organization they commit to keep their Tariffs beneath the bound rate, which is generally around 39 percent. China's reaction is due to the fact that nations usually keep their Tariffs at an average of 9 percent, but when the U. S raised their Tariff on Chinese imported tires to 35 percent, it was still below the average bound rate. This affects the political debate, and leads to misguided perceptions. Take the bilateral deficit between China and the US. In early , a dispute over rare earth minerals was brought into the light between the two countries.

President Obama made an announcement that the United States would be one of a few countries to file a dispute with China. Amongst the United States, Japan and other Western European countries would also be filing disputes as well. This is simply just one of few disputes between the United States and China. It is believed by many experts, including Chris Isidore, a writer for CNN Money, that "any one of the disputes could damage the economies of both countries as well as the relationship between them.

The dispute was filed, and China was charged with putting unfair restrictions on the exportation of rare earth minerals. These minerals were crucial and in high demand by all countries. China denied all of the said charges brought forth "saying its rules are defensible on grounds of environmental and economic sustainability, and suggests there would be consequences if the United States presses the case. There is not one without the other. China's state news agency commented that "past experiences have shown that policymakers in Washington should treat such issues with more prudence, because maintaining sound China-U.

Looking ahead it is possible to note a wide range of issues that can potentially shake the China-U. One of them is energy, and the development of unconventional oil and gas in particular, that may play a visible role in the ongoing superpower competition between China and the U. From to , China was a major currency manipulator. China's competitive position was thus strengthened by as much as 30 to 40 percent at the peak of the intervention.

Currency manipulation explained most of China's large trade surpluses, which reached a staggering 10 percent of its entire GDP in During this period, China's currency manipulation was a point of conflict with the United States. Domestic leaders within the United States pressured the Obama administration to take a hard-line stance against China and compel them to raise the value of their currency, and legislation was introduced to the United States Congress calling on the President to impose tariffs on Chinese imports until China properly values its currency.

Since , the situation changed dramatically, as China stopped artificially deflating its currency, [] [] as the growth in the Chinese economy slowed and Chinese investors made more investments outside the country, leading to a drop in the yuan's value in relation to the dollar, as well as a decline in China's reserves. China is a major creditor and the second largest foreign holder of US public debt [] and has been critical of US deficits and fiscal policy, [] advising for policies that maintain the purchasing value of the dollar [] [] although it had little few options other than to continue to buy United States Treasury bonds.

The United States, along with independent analysts, remains convinced that the PRC conceals the real extent of its military spending. The concerns over the Chinese military budget may come from US worries that the PRC is attempting to threaten its neighbors or challenge the United States. Concerns have been raised that China is developing a large naval base near the South China Sea and has diverted resources from the People's Liberation Army Ground Force to the People's Liberation Army Navy and to air force and missile development.

Andrew Scobell wrote that under President Hu, objective civilian control and oversight of the PLA appears to be weakly applied. On October 27, , American Defense Secretary Robert Gates praised the steps China has taken to increase transparency of defense spending. A recent report stated that five of six US Air Force bases in the area are potentially vulnerable to Chinese missiles and called for increased defenses. Meanwhile, the Bulletin of the Atomic Scientists wrote in a report that the Chinese continue to invest in modernization of their nuclear forces because they perceive that their deterrent force is vulnerable to American capabilities and that further improvement in American missile defenses will drive further Chinese spending in this area.

Chinese defense minister Liang Guanglie has said that China is 20 years behind the United States in military technology. The International Institute for Strategic Studies in a report argued that if spending trends continue China will achieve military equality with the United States in 15—20 years. China and the United States have been described as engaging in a race of military technology. Expansion and development of new weapons by China has been seen as so threatening as to cause planning for withdrawal of US forces from close proximity to China, dispersal of US bases in the region, and development of various new weapon systems.

In , it was reported that the United States would invite a team of senior Chinese logisticians to discuss the possibility of a first-ever logistics cooperation agreement between the two countries. Holmes, Chinese specialist at the U. Naval War College, has said that China's investments towards a potential future conflict are closer to those of the United States than may first appear, because the Chinese understate their spending, the internal price structures of the two countries are different, and the Chinese only need to concentrate on projecting military force a short distance from their own shores.