2011 report to congress - U.S.-China Economic and Security Review ...

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dkrause on DSKHT7XVN1PROD with $$_JOB356The Securities and Exchange Commission should develop country-specificdata to address unique country risks to assure thatU.S. investors have sufficient information to make investmentdecisions. The commission should focus, in particular, on stateownedand -affiliated companies, and subsidies and pricingmechanisms that may have material bearing on the investment.8. Congress urge the administration to review federally subsidizedcontracts provided under the American Recovery andReinvestment Act of 2009 and report on the extent to whichChinese-produced goods and services were procured using suchfunds.9. Congress urge the administration to direct the USTR to moveaggressively to bring more WTO cases against China for violatingits obligations under the WTO Subsidies Agreement.10. Congress urge the administration to direct the USTR tostrengthen its mandated annual review of China’s compliancewith its WTO obligations by adding conclusions and recommendationsto its annual report to Congress.Section 3: Indigenous Innovation and Intellectual PropertyRightsThe Commission recommends that:11. Congress request the administration to report on whether procurementcatalogues are actionable under WTO obligations.12. Congress instruct the administration to insist that all procurementcatalogues at all levels of government be explicitly recalledin order to comply with assurances by President HuJintao to separate government procurement from the catalogues.13. Congress urge the administration to raise with China in theStrategic and Economic Dialogue and the Joint Commission onCommerce and Trade and in other appropriate bilateral andmultilateral venues the need for China to table a serious offerto join the Government Procurement Agreement that providesreciprocal opportunities for access to the estimated $1 trillionin procurement controlled by central, provincial, and local governmentsas well as state-affiliated entities. If China fails toengage in serious negotiations, the U.S. government should restrictaccess to Chinese suppliers to government procurementopportunities and should coordinate policies with the states tolimit procurement contracts with China.14. Congress instruct the administration to make a top prioritywithin the Joint Commission on Commerce and Trade and theStrategic and Economic Dialogue negotiations an agreement tolower the threshold for criminal prosecution of cases of piracyand counterfeiting of business and entertainment software.15. Congress recommend the administration adopt a more reciprocaltrading relationship in critical areas, such as intellectualproperty protection. The United States should demand theVerDate Nov 24 2008 13:46 Nov 10, 2011 Jkt 067464 PO 00000 Frm 00368 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2011\067464.XXX 067464
dkrause on DSKHT7XVN1PROD with $$_JOB357same level of treatment from its major trading partners thatit provides to those other nations. The administration shouldidentify those sectors that China has failed to open up to tradein goods and services and identify the practices that act to nullifyand impair anticipated economic benefits for U.S. producersand service providers. The administration should seekthe elimination of such practices in a timely manner and, if unableto gain sufficient market access, should evaluate what reciprocalactions may be appropriate.16. Congress urge the administration to insist that China auditthe use of licensed software on government computers ratherthan just audit the budget for software procurement. The auditshould be performed by the World Bank.17. Congress assess the reauthorization of Super 301 to assist inthe identification of the policies and practices that China pursuesthat create the greatest impediment to U.S. exports enteringthe Chinese market and the most important policies orpractices that unfairly or unjustifiably harm U.S. producersand workers in the U.S. market. Priority should be given to addressingsuch practices by the United States Trade Representativeunder such legislation.18. The President should direct USTR to move aggressively tobring cases to the WTO to enforce intellectual property rights.Section 4: China’s 12th Five-Year Plan and Technology Developmentand Transfers to ChinaThe Commission recommends that:19. Congress hold hearings to assess the success of the Strategicand Economic Dialogue and the Joint Committee on Commerceand Trade in addressing Chinese actions to implement itsWTO commitments, including with regard to the issue of technologytransfers. In preparation for such hearings, Congressshould request that the Government Accountability Office preparean inventory of specific measures agreed to as part ofthese bilateral discussions and the implementation efforts ofthe Chinese.20. Congress direct the Government Accountability Office to undertakean evaluation of investments and operations of U.S. firmsin the Chinese market and identify what federally supportedR&D is being utilized in such facilities and the extent to which,and on what terms, such R&D has been shared with Chineseactors in the last ten years.Section 5: China’s Internal DilemmasThe Commission recommends that:21. The administration work with the Chinese leaders in the Strategicand Economic Dialogue and the Joint Commission onCommerce and Trade talks to identify specific commodities andproducts in the case where supply does not adequately meetdemand in China and where enhanced access for U.S. goodsVerDate Nov 24 2008 13:46 Nov 10, 2011 Jkt 067464 PO 00000 Frm 00369 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2011\067464.XXX 067464
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12011REPORT TO CONGRESSof theU.S.-C
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U.S.-CHINA ECONOMIC AND SECURITY RE
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dkrause on DSKHT7XVN1PROD with $$_J
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CONTENTSPageTRANSMITTAL LETTER TO T
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23Figure 1:China’s Share of the U
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25The weakness in U.S. exports of a
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31Table 3:RMB Bond Issuances by Mul
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35of bilateral negotiations under t
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37Stonewalling the WTO: A Case Stud
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39that China’s existing system of
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41now. Because the structures of th
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43How Big Is China’s State Sector
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45Fortune Global 500, compared to j
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47panies are less profitable, after
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49erate primarily within state-cont
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57Figure 1: Chinese FDI Stock in th
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63U.S. firms with sensitive technol
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65Addendum I: SASAC Companies, Larg
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67Addendum I: SASAC Companies, Larg
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69dkrause on DSKHT7XVN1PROD with $$
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71January 2010, the heads of 19 U.S
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77cause Beijing had sought to exclu
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81China in Search of Western Techno
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83scious policy seeking to drive Ch
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89Like previous plans, the 12th Fiv
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95Consultative Conference National
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99panies account[ed] for fully 7 pe
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101Dr. Shih has testified before th
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103ment subsidies, which in turn wi
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105Addendum II: Figures 1-2Figure 1
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113drivers cited increased fuel pri
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123uating from college and hoping t
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131unfairly or unjustifiably harm U
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161gress, the DoD noted that China
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165eral U.S. military policies, inc
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167Figure 1:Territorial Disputes in
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171provides guidelines for dealing
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173network exploitations to facilit
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181ligence, surveillance, and recon
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187Therefore, the PLA maintains the
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189Of import, the PLA’s geographi
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197ther moves toward independence,
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199trates the depth of China’s sp
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201Figure 2:Representation of Beido
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205ganization, modeled on the Europ
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207China’s leadership also places
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211[General Armaments Department] p
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213Table 2: Select Chinese Satellit
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215weapons or coorbital satellite w
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217Malicious Cyber ActivitiesDirect
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RECOMMENDATIONSChina’s ‘‘Area
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239320. Chang Xianqi, Military Astr
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243woman Jiang Yu simply expressed
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245Table 1:Timeline of Sino-North K
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249China also provides economic sup
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251economic and social strains woul
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255Iran’s South Pars Gas Field af
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257When asked by Commissioners abou
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281trade, and dispute settlement. 2
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287of Request to the United States
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289fense, since its current fleet o
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Page 331 and 332: 323mation Office. Day-to-day superv
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Page 383 and 384: 375ecutive Schedule under section 5
Page 395 and 396: APPENDIX IIIPUBLIC HEARINGS OF THE
Page 399 and 400: APPENDIX IIIALIST OF WITNESSES TEST
Page 401 and 402: 393Alphabetical Listing of Panelist
Page 405 and 406: 397In TaiwanU.S. Government• Amer
Page 407 and 408: APPENDIX VLIST OF RESEARCH MATERIAL
Page 409 and 410: 401The National Security Implicatio
Page 411 and 412: APPENDIX VIACRONYMS AND ABBREVIATIO
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