ANNUAL REPORT

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510 Section 4: China and North Korea The Commission recommends: 18. Congress require the U.S. Department of State to produce an unclassified report assessing China’s compliance with UN resolutions on North Korea. Chapter 4: China and the U.S. Rebalance to Asia The Commission recommends: 19. Congress express support for more frequent U.S. freedom of navigation operations in the South China Sea in conjunction with U.S. allies and partners. 20. Congress direct the U.S. Department of Defense to include a permanent section in its Annual Report on Military and Security Developments Involving the People’s Republic of China on the role and activities of China’s maritime militia and the implications for U.S. naval operations. dkrause on DSKHT7XVN1PROD with USCC VerDate Sep 11 2014 12:36 Nov 02, 2016 Jkt 020587 PO 00000 Frm 00036 Fmt 6601 Sfmt 6601 G:\GSDD\USCC\2016\FINAL\11_C4_B_M.XXX 11_C4_B_M
dkrause on DSKHT7XVN1PROD with USCC 511 DISSENTING VIEWS OF COMMISSIONER ROBIN CLEVELAND While there is much to commend in the Commission’s 2016 reporting on Chinese security policy and programs, my dissent derives from concern about an increasing tendency to confuse objective fact with editorial opinion with regard to economic developments in China. The Commission has a narrow mandate to examine the national security implications of economic and trade issues. Historically, the Commission’s credibility and service to the Congress and the public has relied upon a careful and balanced slate of expert witness testimony combined with superb staff research. With few exceptions, report chapters and the related conclusions have reflected a full, balanced presentation of issues which then was followed by Commission recommendations based on interpretation of the data. The chapters informed, the conclusions summarized, and the recommendations offered an important editorial perspective. Regrettably, much of the content of the economic chapters now reflects the personal judgments and interests of Commissioners unsupported by testimony or fact. The drift away from objective and reliable reporting damages the usefulness and value of the report. As one example, the report missed an important opportunity to describe the unprecedented change this year in virtually all global leaders’ views regarding China’s stalled economic path and the emerging consensus on the significant consequences of their failing to move forward with reforms. Instead of a serious presentation of the complex economic issues and options, the report places emphasis on broken ‘‘promises’’ and what the CCP leadership ‘‘wants’’. What they want is neither knowable nor as relevant as explaining what most world leaders and scholars believe are the economic consequences—both in China and globally—if the Chinese government fails to do what needs to be done. Not only does the report fall short in presenting a thoughtful and complete economic picture, there are recommendations which appear to bear no relationship to the content of the report. For example, with no reference to witness testimony, external reports or explanatory data, the Commission recommends Congress use the CFIUS process to bar all Chinese state owned enterprises from acquiring US companies. Perhaps it makes sense to enhance the CFIUS process in a meaningful way to protect American national security interests, but this recommendation seems to rely on demonizing the Chinese without any consideration or presentation of the incentives or risks of such a course. Leaders from around the world and every realm including NGOs, business and politics, have been deeply and increasingly critical of the continued deterioration on every front in China. Free enterprise is as much in peril as free speech. The criticism and concern are well deserved, but to develop solutions, the entire picture must be understood and presented for debate. When China spends nearly $8 billion to buy 80 U.S. manufactured commercial aircraft as they did in October, American jobs, trade and economic interests demand every effort be made to understand how best to make a key relationship work to mutual benefit. Dismissing that relationship VerDate Sep 11 2014 12:36 Nov 02, 2016 Jkt 020587 PO 00000 Frm 00037 Fmt 6602 Sfmt 6602 G:\GSDD\USCC\2016\FINAL\11_C4_B_M.XXX 11_C4_B_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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414 moving up one place compared to
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418 Chinese Censorship of Prize-Win
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420 Hong Kong and the ‘‘Panama
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424 Table 1: Select PLA Hong Kong G
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428 sitive periods in Hong Kong, le
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436 150. Commission meeting with Ta
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442 Korea. The resolution also bans
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444 increase pressure on Pyongyang.
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446 pand China-South Korea ties. 54
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448 Technical Details of THAAD The
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456 Korea runs perpetual merchandis
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Page 539 and 540: APPENDIX II BACKGROUND OF COMMISSIO
Page 549 and 550: APPENDIX III PUBLIC HEARINGS OF THE
Page 551 and 552: 537 June 9, 2016: Public Hearing on
Page 553 and 554: APPENDIX IIIA LIST OF WITNESSES TES
Page 555 and 556: 541 Alphabetical Listing of Panelis
Page 557 and 558: APPENDIX IV LIST OF RESEARCH MATERI
Page 561 and 562: 547 China’s Military Agreements w
Page 563 and 564: APPENDIX V ACRONYMS AND ABBREVIATIO
Page 565 and 566: 551 OPM PBOC PLA PMI PPI PPP PRC QD
Page 567: 553 2016 COMMISSION STAFF MICHAEL R
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