US-China Economic and Security Report...

... Compliments of the FBI's November Threat Assessment:





(U) US-China Economic and Security Review Commission Releases 2010 Annual Report to
Congress (USCC Press Report, 17 NOV 2010)
(U) The US-China Economic and Security Review Commission was created by Congress to report on the
national security implications of the bilateral trade and economic relationship between the United States
and the People’s Republic of China. In November, the US-China Economic and Security Review
Commission released its 2010 Report to Congress. The Commission’s Chairman and Vice Chairman
discussed the Commission’s findings and recommendations.
(U) In his opening statement, Commission Chairman Dan Slane said “The 2010 Annual Report reflects
the Commission’s conclusions that China has failed in some notable areas to fulfill the promises it made
nine years ago when it joined the World Trade Organization. Specifically, China is adopting a highly
discriminatory policy of favoring domestic producers over foreign manufacturers. Under the guise of
fostering “indigenous innovation” in its economy, the government of China appears determined to
exclude foreigners from bidding on government contracts at the central, provincial, and local levels. In
addition, China has proposed that its many state-owned corporations be exempt from WTO rules on
procurement. The Chinese government quite simply intends to wall off a majority of its economy from
international competition.”
(U) In her opening statement, Vice Chairman Carolyn Bartholomew commented on China’s military
modernization, saying “As a result of China’s improved offensive air and missile capabilities, the Chinese
military has strengthened its capacity to threaten US forces and bases in the region. Currently, China’s
conventional missile capabilities alone may be sufficient to temporarily knock out five of the six United
States air bases in East Asia. Saturation missile strikes could destroy US air defenses, runways, parked
aircraft, and fuel and maintenance facilities. Complicating this scenario is the future deployment of
China’s anti-ship ballistic missile, which could hold US aircraft carriers at bay outside their normal
operating range.”
(U) Among the topics in the 316-page report:
(U) Economics and Trade Issues:
(U) National Defense Issues:
• China’s growing air and missile capabilities, and the increasing capacity to strike US bases and
allies in the region.
• China’s improving commercial aviation manufacturing capabilities, and the spillover benefits for
China’s defense aviation industry.
• The increasingly sophisticated nature of malicious computer activity associated with China.
(U) Foreign Affairs Issues:
• China’s increasing political, economic, energy and security interactions with Southeast Asia, and
the implications for US interests in the region.
• Recent developments in the China-Taiwan relationship, and implications for the United States.
(U) Energy and Environmental Issues:
• China’s efforts to promote green energy in order to increase its energy security, prevent
environmental degradation, and develop a globally competitive green energy industry.
• Ohio’s response to China’s promotion of its alternative energy industries.
(U) Censorship Issues:
• How China’s revised state secrets laws may conflict with US disclosure requirements and put US
investments in Chinese firms at risk.
The full report is available at: http://www.uscc.gov/annual_report/2010/annual_report_full_10.pdf