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

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CONTENTSPageTRANSMITTAL LETTER TO THE CONGRESS ............................................................... iiiCOMMISSIONERS APPROVING THE REPORT .............................................................. vEXECUTIVE SUMMARY ............................................................................................... 1KEY RECOMMENDATIONS ................................................................................... 14INTRODUCTION .......................................................................................................... 172011 REPORT TO CONGRESS OF THEU.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSIONChapter 1: The U.S.-China Trade and Economic Relationship ............... 21Section 1: The U.S.-China Trade and Economic Relationship’s Current Statusand Significant Changes During 2011 ..................................................... 21Section 2: Chinese State-Owned Enterprises and U.S.-China Bilateral Investment............................................................................................................ 40Section 3: Indigenous Innovation and Intellectual Property Rights ................ 70Section 4: China’s Five-Year Plan and Technology Development and Transfersto China ..................................................................................................... 88Section 5: China’s Internal Dilemmas ................................................................ 107Recommendations .................................................................................................. 129Endnotes ................................................................................................................. 132Chapter 2: China’s Activities Directly Affecting U.S. Security Interests........................................................................................................................ 155Section 1: Military and Security Year in Review .............................................. 155Section 2: China’s ‘‘Area Control Military Strategy’’ ......................................... 182Section 3: The Implications of China’s Civil and Military Space Activities .... 198Recommendations .................................................................................................. 221Endnotes ................................................................................................................. 223Chapter 3: China’s Foreign Policy ................................................................. 241Section 1: An Overview of China’s Relations with North Korea and Iran ...... 241Section 2: Actors in China’s Foreign Policy ....................................................... 261Section 3: Taiwan ................................................................................................. 275Section 4: Hong Kong .......................................................................................... 290Recommendations .................................................................................................. 299Endnotes ................................................................................................................. 301Chapter 4: China’s Public Diplomacy Initiatives Regarding Foreignand National Security Policy ......................................................................... 321Recommendations .................................................................................................. 342Endnotes ................................................................................................................. 343Comprehensive List of the Commission’s Recommendations .................. 355Additional Views of Commissioners ................................................................ 361dkrause on DSKHT7XVN1PROD with $$_JOBVerDate Nov 24 2008 13:46 Nov 10, 2011 Jkt 067464 PO 00000 Frm 00011 Fmt 5904 Sfmt 5904 G:\GSDD\USCC\2011\067464.XXX 067464(VII)
Page 1 and 2: 12011REPORT TO CONGRESSof theU.S.-C
Page 3 and 4: U.S.-CHINA ECONOMIC AND SECURITY RE
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Page 31 and 32: 23Figure 1:China’s Share of the U
Page 33 and 34: 25The weakness in U.S. exports of a
Page 39 and 40: 31Table 3:RMB Bond Issuances by Mul
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Page 53 and 54: 45Fortune Global 500, compared to j
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49erate primarily within state-cont
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57Figure 1: Chinese FDI Stock in th
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63U.S. firms with sensitive technol
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65Addendum I: SASAC Companies, Larg
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67Addendum I: SASAC Companies, Larg
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69dkrause on DSKHT7XVN1PROD with $$
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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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3190aRCRD&ss=Hong+Kong&s=News; Pete
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323mation Office. Day-to-day superv
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327Although the slogans change over
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335What Constitutes a ‘‘Core In
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339Selected CAIFC/CPD Track Two Exc
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341disseminated through diplomatic
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375ecutive Schedule under section 5
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APPENDIX IIIPUBLIC HEARINGS OF THE
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APPENDIX IIIALIST OF WITNESSES TEST
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393Alphabetical Listing of Panelist
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397In TaiwanU.S. Government• Amer
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APPENDIX VLIST OF RESEARCH MATERIAL
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401The National Security Implicatio
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APPENDIX VIACRONYMS AND ABBREVIATIO
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