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dkrause on DSKHT7XVN1PROD with USCC 464 ENDNOTES FOR SECTION 4 1. Somini Sengupta and Choe Sang-hun, ‘‘UN Toughens Sanctions on North Korea in Response to Its Nuclear Program,’’ New York Times, March 2, 2016. 2. Bloomberg, ‘‘China to Assess Using Trade to Hurt South Korea over THAAD,’’ August 12, 2016; Michelle Nichols, ‘‘U.S. Censure of North Korea Missile Thwarted,’’ Reuters, August 9, 2016; and Amy Qin and Choe Sang-hun, ‘‘South Korean Missile Defense Deal Appears to Sour China’s Taste for K-Pop,’’ New York Times, August 7, 2016. 3. Jin Jingyi, ‘‘China’s Anti-Japanese War and the Independence Movement on the Korean Peninsula,’’ in Carla Freeman, ed., China and North Korea: Strategic and Policy Perspectives from a Changing China, Palgrave Macmillan, 2015, 109– 118; Jonathan D. Pollack, No Exit: North Korea, Nuclear Weapons and International Security, Routledge, May 2011, 26–34; and Treaty of Friendship, Co-operation and Mutual Assistance between the People’s Republic of China and the Democratic People’s Republic of Korea, July 11, 1961. 4. South China Morning Post (Hong Kong), ‘‘China Unlikely to Come to North Korea’s Defence if Tensions Escalate over Nuclear Weapons Tests, Say Chinese Experts,’’ April 17, 2016; Zhu Feng and Nathan Beauchamp-Mustafaga, ‘‘North Korea’s Security Implications for China,’’ in Carla Freeman, ed., China and North Korea: Strategic and Policy Perspectives from a Changing China, Palgrave Macmillan, 2015, 46; and Treaty of Friendship, Co-operation and Mutual Assistance between the People’s Republic of China and the Democratic People’s Republic of Korea, July 11, 1961. 5. Yu Tieyun, ‘‘The Significance of the Korean Peninsula in Xi Jinping’s Global Strategy,’’ in Chinese Perspectives toward the Korean Peninsula: In the Aftermath of North Korea’s Fourth Nuclear Test, Stimson Center, June 2016, 18–20. 6. Shi Yinhong, ‘‘Painful Lessons, Reversing Practices, and Ongoing Limitations: China Facing North Korea Since 2003’’ in Carla Freeman, ed., China and North Korea: Strategic and Policy Perspectives from a Changing China, Palgrave Macmillan, 2015, 27–28. 7. U.S. expert on the North Korean economy, meeting with Commission, May 26, 2016; Congressional Research Service, Foreign Assistance to North Korea, April 2, 2014, 11. 8. U.S. expert on the North Korean economy, meeting with Commission, May 26, 2016. 9. Agence France-Presse, ‘‘UN Condemnation of North Korean Missile Reaching Japanese Waters Curtailed by China,’’ August 3, 2016; Reuters, ‘‘China Says Opposes Unilateral Sanctions on North Korea,’’ March 17, 2016; Brian Padden, ‘‘Russia, China Object to UN North Korea Human Rights Meeting,’’ Voice of America, December 8, 2015; and U.S.-China Economic and Security Review Commission, 2014 Annual Report to Congress, November 2014, 447. 10. Asan Institute for Policy Studies and C4ADS, ‘‘In China’s Shadow: Exposing North Korean Overseas Networks,’’ August 2016, 34–36; UN Security Council, Report of the Panel of Experts Established Pursuant to Resolution 1874 (2009), February 24, 2016, 29–30, 32–37, 39–40; and Julian Ryall, ‘‘Chinese Firms Breaking UN Embargo on North Korea,’’ Telegraph (UK), June 8, 2012. 11. Jamil Anderlini, ‘‘North Korea Makes Public its Paranoia over China,’’ Financial Times, May 18, 2016; John Power, ‘‘Is North Korea Fed Up with China?’’ Diplomat (Japan), April 1, 2016; and Adam Cathcart, ‘‘Keeping China in Check: How North Korea Manages its Relationship with a Superpower,’’ China Policy Institute (University of Nottingham), July 28, 2014. 12. John Power, ‘‘Is North Korea Fed up with China?’’ Diplomat (Japan), April 1, 2016; Kerry Brown, ‘‘What China and North Korea Really Think of Each Other,’’ Diplomat (Japan), February 23, 2015; and U.S.-China Economic and Security Review Commission, Hearing on Recent Developments in China’s Relations with Taiwan and North Korea, written testimony of Sue Mi Terry, June 5, 2014. 13. John Power, ‘‘Is North Korea Fed up with China?’’ Diplomat (Japan), April 1, 2016; Jonathan D. Pollack, No Exit: North Korea, Nuclear Weapons and International Security, Routledge, May 2011, 201–202. 14. Elizabeth Shim, ‘‘China, North Korea Exchange War of Words through Media,’’ United Press International, April 8, 2016; Yu Shaohua, ‘‘Chinese Views of North Korea’s Regional Role,’’ in Carla Freeman, ed., China and North Korea: Strategic and Policy Perspectives from a Changing China, Palgrave Macmillan, 2015, 81–82. 15. Shi Yinhong, ‘‘Painful Lessons, Reversing Practices, and Ongoing Limitations: China Facing North Korea Since 2003’’ in Carla Freeman, ed., China and VerDate Sep 11 2014 14:49 Nov 01, 2016 Jkt 020587 PO 00000 Frm 00109 Fmt 6601 Sfmt 6621 G:\GSDD\USCC\2016\FINAL\09_C3_M.XXX 09_C3_M
dkrause on DSKHT7XVN1PROD with USCC 465 North Korea: Strategic and Policy Perspectives from a Changing China, Palgrave Macmillan, 2015, 20. 16. U.S.-China Economic and Security Review Commission, 2014 Annual Report to Congress, November 2014, 448–449. 17. Yonhap News Agency (South Korea), ‘‘N. Korea Fires Three Short-Range Missiles into East Sea,’’ June 14, 2015; Agence France-Presse, ‘‘N. Korea Test-Fires Submarine-Launched Ballistic Missile,’’ May 10, 2015; Will Ripley and Mariano Castillo, ‘‘Report: North Korea Tests Ballistic Missile,’’ CNN, May 9, 2015; Agence France-Presse, ‘‘N. Korea Fires Four Short-Range Missiles into Sea,’’ April 3, 2015; Reuters, ‘‘North Korea Test Fires Seven Surface-to-Air Missiles—South Korea,’’ March 13, 2015; K.J. Kwon, ‘‘North Korea Fires Two Missiles into Sea, South Korea Says,’’ CNN, March 2, 2015; Choe Sang-hun, ‘‘North Korea Tests Five Missiles,’’ New York Times, February 8, 2015; and U.S.-China Economic and Security Review Commission, 2014 Annual Report to Congress, November 2014, 450. 18. UN Security Council, Security Council Press Statement on Nuclear Test Conducted by Democratic People’s Republic of Korea, January 6, 2016. 19. Sun Ru, ‘‘Beijing and Pyongyang: A ‘Special Friendship’ Facing the Final Curtain,’’ Italian Institute for International Political Studies, May 2016, 10; China’s Ministry of Foreign Affairs, Foreign Ministry Spokesperson Hua Chungying’s Regular Press Conference on January 7, 2016, January 7, 2016; Justin McCurry and Tania Branigan, ‘‘North Korea Stages Nuclear Test in Defiance of Bans,’’ Guardian, February 12, 2013; and David E. Sanger, ‘‘Test Follows Warning from U.S.,’’ New York Times, October 9, 2006. 20. Victor Cha, ‘‘Snapshot of North Korea’s Five Nuclear Tests,’’ Beyond Parallel, September 9, 2016. 21. Ben Blanchard and Michael Martina, ‘‘China Slams North Korea’s Nuclear Test but Unlikely to Do Much,’’ Reuters, September 9, 2016; Chad O’Carroll, ‘‘North Korea’s 5th Nuke Test: Why Now and What Next?’’ NK News, September 9, 2016. 22. China’s Ministry of Foreign Affairs, Foreign Ministry Spokesperson Hua Chunying’s Regular Press Conference on January 8, 2016, January 8, 2016. 23. U.S. Department of State, ‘‘Press Availability with Chinese Foreign Minister Wang Yi,’’ January 27, 2016. 24. Kim Kwang-tae, ‘‘No Breakthrough in Park-Xi Conversation on North Korea,’’ Yonhap News Agency (South Korea), February 6, 2016; Elizabeth Shim, ‘‘Chinese Envoy’s North Korea Trip Ends with No Guarantee,’’ United Press International, February 4, 2016; and J.H. Ahn, ‘‘China Envoy’s Visit to North Korea Won’t Stop Launch: S. Korean Experts,’’ NK News, February 3, 2016. 25. China’s Ministry of Foreign Affairs, Vice Foreign Minister Zhang Yesui: DPRK’s Nuclear Test Is not Conducive to Peace and Stability on the Peninsula, September 10, 2016. 26. Xinhua, ‘‘The Ministry of Foreign Affairs Issues a Statement on North Korea Once Again Carrying Out a Nuclear Test,’’ September 9, 2016. Staff translation. http://news.xinhuanet.com/world/2016-09/09/c_1119539743.htm. 27. White House, Readout of the President’s Meeting with Premier Li Keqiang of China, September 19, 2016. 28. Somini Sengupta and Choe Sang-hun, ‘‘UN Toughens Sanctions on North Korea in Response to Its Nuclear Program,’’ New York Times, March 2, 2016. 29. China’s Ministry of Foreign Affairs, Foreign Ministry Spokesperson Hong Lei’s Regular Press Conference on March 1, 2016, March 1, 2016. 30. China’s Ministry of Foreign Affairs, Permanent Representative of China to the UN Liu Jieyi Clears China’s Position on Adoption of UNSCR on DPRK, March 2, 2016. 31. Balbina Hwang, visiting professor at Georgetown University and American University, meeting with Commission, May 26, 2016. 32. Svati Kirsten Narula, ‘‘After North Korea’s Nuclear Testing, China Will Impose Sanctions—with a Major Loophole,’’ Quartz, April 5, 2016. 33. Bruce Klingner, ‘‘Backgrounder: Chinese Foot-Dragging on North Korea Thwarts U.S. Security Interests,’’ Heritage Foundation, August 11, 2016, 2. 34. UN Security Council, Resolution 2270 (2016), March 2, 2016. 35. North Korea Sanctions and Policy Enhancement Act of 2016, Pub. L. No. 114–122 (2016). 36. Jay Solomon, ‘‘U.S. Moves to Cut off North Korea from Banking System,’’ Wall Street Journal, June 2, 2016. 37. Jay Solomon, ‘‘U.S. Moves to Cut off North Korea from Banking System,’’ Wall Street Journal, June 2, 2016. 38. Carol Morello, ‘‘U.S. Sanctions North Korean Leader Kim Jong Un,’’ Washington Post, July 6, 2016; U.S. Department of State, Report on Human Rights Abuses and Censorship in North Korea, July 6, 2016. VerDate Sep 11 2014 14:49 Nov 01, 2016 Jkt 020587 PO 00000 Frm 00110 Fmt 6601 Sfmt 6621 G:\GSDD\USCC\2016\FINAL\09_C3_M.XXX 09_C3_M
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USCC 2016 ANNUAL REPORT
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1 2016 REPORT TO CONGRESS of the U.
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U.S.-CHINA ECONOMIC AND SECURITY RE
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• The safety of food, drug, and o
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CONTENTS Page TRANSMITTAL LETTER TO
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IX Page Recommendations ...........
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2 ernment’s “going out” strat
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4 economically and politically stra
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6 wage rates are determined by free
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8 while allowing a greater role for
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10 began construction on its first
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12 from—the People’s Republic o
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14 cluding cyber and human intellig
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16 exporter of manufactured goods,
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18 Pakistan’s economic and securi
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20 Beijing appears to remain skepti
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22 trends in Hong Kong with regard
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24 UNSCR 2270. However, in May and
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26 Korea, designating Dandong Hongx
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28 tional order—both before and a
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30 to examine China’s economic an
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32 debt, and jeopardizing long-term
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Introduction CHAPTER 1 U.S.-CHINA E
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37 Statistics with Chinese Characte
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39 up from 52.3 percent in the seco
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41 Early signs suggest President Xi
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43 Figure 4: China’s Total Debt b
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45 reserves to defend the RMB. 75 I
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47 The pace of U.S. export growth t
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49 The United States continued to r
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51 commitments, China has only take
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53 Table 3: Top Five Business Chall
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55 U.S. Tech Firms and Their Chines
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57 ment of Justice’s May 2014 ind
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59 Internet Censorship As a result
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61 on the future of U.S.-China rela
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63 Chapter 1, Section 2, “State-O
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65 Table 5: Failed Chinese Bids for
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67 • Accelerating Bilateral Inves
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69 cess capacity, which will share
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71 United States Challenges Chinese
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73 rulings of the DSB [Dispute Sett
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75 Conclusions • In 2015, the U.S
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77 Addendum I: WTO Cases Recent and
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79 ENDNOTES FOR SECTION 1 1. Lucy H
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81 55. Gabriel Wildau and Don Weinl
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83 119. American Chamber of Commerc
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85 and Espionage Operations, oral t
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87 217. Kane Wu, “Chinese Compani
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89 271. Office of the U.S. Trade Re
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93 Lardy, senior fellow at the Pete
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99 pany competitiveness and stimula
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105 Table 2: Select Chinese Overcap
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107 levels. 135 The situation is on
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109 Figure 5: China’s Monthly Cru
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111 Figure 6: U.S. Steel Industry Q
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123 Addendum I: Section 15 of China
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125 Addendum II: AD and CVD Investi
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141 dkrause on DSKHT7XVN1PROD with
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143 lifetime cost of bringing the e
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145 gets achieved). 57 Using satell
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147 cost of compliance,’’ and p
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151 boost the efficiency of China
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Table 1: 157 Chinese Attempted and
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Table 1: 159 Chinese Attempted and
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163 Figure 4: China’s Total Debt-
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173 weapons, opens the U.S. militar
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175 ests, and allow for greater vol
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177 Addendum I: Key Targets in Chin
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179 Addendum I: Key Targets in Chin
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195 The ultimate impact of the ruli
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197 Environmental Impact of China
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201 China’s Maritime Disputes in
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203 Reform and Reorganization of th
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207 • PLA Army Headquarters: Chin
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211 Figure 5: Type 072A Tank Landin
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215 Figure 7: JL-2 Missile Range Co
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221 Space-Tracking Facility in Arge
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223 Table 1: Significant PLA Bilate
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227 Nigeria will be the first expor
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231 tional annexes to the 2014 Noti
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233 Select U.S.-China Security-Rela
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257 China’s Core Interests—Cont
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259 guerrillas in Colombia and held
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271 stan. 109 In 2014, the PLA Air
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275 conflict Chinese expeditionary
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279 RECOMMENDATIONS Developments in
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SECTION 3: CHINESE INTELLIGENCE SER
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291 Strategic Support Force In Dece
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293 of advanced intelligence, surve
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295 tives, and sexual entrapment. 4
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297 information to a Chinese intell
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299 such as power transmission grid
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301 for transferring trade secrets
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303 nal U.S. discussions of issues
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305 ENDNOTES FOR SECTION 3 1. U.S.-
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307 29. U.S. Department of Justice,
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309 63. U.S. Department of Justice,
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311 106. Eric Holder, “Attorney G
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314 sure its own ambitions in South
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316 Chinese foreign direct investme
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318 • Pakistan: In 2015, China an
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320 India “Acts East” and Puts
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322 Counter Terrorism and Religious
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324 tivities of the Dalai Lama and
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326 incursions across the border fr
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328 conducive to sea lane protectio
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330 Karachi Port, that could eventu
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332 India and OBOR India has not en
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334 China’s Arms Sales to Pakista
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336 For China, the goals of CPEC ar
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338 according to Mr. Small, “The
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340 side the Treaty on the Non-Prol
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342 Facets of U.S.-India Defense Re
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344 of China, but has advocated for
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346 • Recent U.S.-China tensions
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348 24. Debasish Roy Chowdhury, “
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350 71. Jeff Smith, Cold Peace: Chi
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352 127. U.S.-China Economic and Se
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354 2016, 86; Andrew Small, The Chi
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358 Taiwan’s Economic Challenges
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364 agreements. 57 Since then, many
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366 $67.2 billion, comprising 25.4
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368 Foreign Direct Investment China
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370 is leading the initiative, have
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374 Taiwan and the 11-Dash Line The
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384 trade-based partner to an innov
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390 • China’s military moderniz
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410 Hong Kong’s Political Gossip
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APPENDIX II BACKGROUND OF COMMISSIO
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APPENDIX III PUBLIC HEARINGS OF THE
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537 June 9, 2016: Public Hearing on
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APPENDIX IIIA LIST OF WITNESSES TES
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541 Alphabetical Listing of Panelis
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APPENDIX IV LIST OF RESEARCH MATERI
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547 China’s Military Agreements w
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APPENDIX V ACRONYMS AND ABBREVIATIO
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551 OPM PBOC PLA PMI PPI PPP PRC QD
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553 2016 COMMISSION STAFF MICHAEL R
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