ANNUAL REPORT

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76 acquisition deals. Although the number of Chinese transactions reviewed increased in absolute terms, it declined as a share of all Chinese acquisitions, and the vast majority of reviewed transactions proceed. • China appears to be conducting a campaign of commercial espionage against U.S. companies involving a combination of cyber espionage and human infiltration to systematically penetrate the information systems of U.S. companies to steal their intellectual property, devalue them, and acquire them at dramatically reduced prices. • The U.S. government’s efforts to address tensions in the U.S.-China relationship continue to yield only limited results. At the final round of the Strategic and Economic Dialogue talks under the Obama Administration, participants failed to achieve any major breakthroughs but left with some deliverables on financial sector cooperation. Industrial overcapacity topped the U.S. economic agenda, replacing currency as its primary concern, but China only made a vague pledge with regard to steel overcapacity. The unwelcoming investment climate for U.S. companies in China, along with China’s recently passed law restricting foreign nongovernmental organizations, also added friction to the talks. • China’s adherence to the World Trade Organization (WTO) principles and its Protocol of Accession remains mixed, partly due to China’s opaque subsidy regime. Recently, the United States initiated WTO cases on China’s aircraft taxation, export restrictions on raw materials, and agricultural subsidies. The United States also requested consultations over China’s continued imposition of antidumping duties on U.S. broiler chicken products, in violation of an earlier WTO ruling.
77 Addendum I: WTO Cases Recent and Ongoing WTO Cases Brought by the United States against China No. Title Request for Consultations Panel Report Status DS427 Antidumping and Countervailing Duty Measures on Broiler Products September 20, 2011 August 2, 2013 In May 2016, the United States requested a second round of consultations with China over China’s alleged noncompliance with a DSB ruling on AD and CVD duties on broiler products from the United States. DS450 Certain Measures Affecting the Automobile and Automobile-Parts Industries September 17, 2012 Dispute resolved in consultations stage China agreed to end its subsidy program for automobile and automobile parts enterprises. DS489 Subsidies for Demonstration Bases and Common Service Platform Programs February 11, 2015 Panel established on April 22, 2015; MOU reached April 14, 2016 China agreed to end its demonstration bases export subsidy program in an MOU reached with the United States. DS501 Tax Measures Concerning Certain Domestically Produced Aircraft December 8, 2015 In consultations; panel not yet formed The United States requested consultations with China regarding tax measures in relation to the sale of certain domestically produced aircraft in China. DS508 Export Duties on Certain Raw Materials July 13, 2016 In consultations; panel not yet formed The United States requested consultations with China over China’s exports subsidies on nine raw materials. DS511 Domestic Support for Agricultural Producers September 13, 2016 In consultations; panel not yet formed The United States requested consultations with China over China’s domestic support for rice, wheat, and corn. Source: World Trade Organization; compiled by Commission staff.
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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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Page 49 and 50: Introduction CHAPTER 1 U.S.-CHINA E
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dkrause on DSKHT7XVN1PROD with USCC
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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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460 pressure is more likely to brin
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462 ty for sanctions violations, co
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479 sailors would be stationed in J
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485 Table 1: U.S. Goods Trade with
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489 basis for President Obama’s c
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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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