Updated February 3, 2021
U.S.-China Relations
Overview
investment (FDI) flows have slowed since 2017, while
The Joseph R. Biden Administration has signaled
other ties not captured in trade and FDI data have
significant continuity with the Donald J. Trump
expanded, including financial investments and China’s use
Administration in its view of the challenge the People’s
of U.S. open source technology platforms. U.S. concerns
Republic of China (PRC or China) poses to U.S. interests.
about China’s trade practices and barriers center on the
In written responses to questions from Senators, then-
expansive role of the state in China’s economy, China’s
Secretary of State-nominee Antony J. Blinken described
domestic market restrictions in sectors in which China is
China as “engaged in conduct that blunts our technological
expanding overseas, and China’s efforts to export rules and
edge, threatens our alliances and our influence in
standards globally. China has been largely unwilling to
international organizations, and is designed to make
acknowledge and address U.S. concerns, which are now
America and its allies more dependent on China, and China
evolving into broader considerations about how China’s
less dependent on America and our allies.” Blinken has also
actions may challenge U.S. economic competitiveness and
stated that he believes China’s treatment of its Uyghur
national security. U.S. supply chain vulnerabilities exposed
ethnic minority constitutes genocide. Secretary of Defense
during the Coronavirus Disease 2019 (COVID-19)
Lloyd Austin, at his own confirmation hearing, called China
pandemic prompted Congress to advance legislation, such
“the most significant threat going forward.” China is
as P.L. 116-136, to encourage diversification, supply chain
“already a regional hegemon,” he said, and seeks to become
transparency, and some on-shoring of selected production.
“the preeminent power in the world in the not-too-distant
future.” Biden did not immediately schedule a call with
In 2018, the Trump Administration’s U.S. Trade
China’s top leader, Xi Jinping, instead prioritizing calls to
Representative (USTR), acting under Section 301 of the
allies and partners and Russian President Vladimir Putin.
Trade Act of 1974 (19 U.S.C. §2411), concluded that China
engages in forced technology transfer, cyber-enabled theft
The Biden Administration is reviewing the Trump
of U.S. intellectual property (IP) and trade secrets,
Administration’s China actions. It has pledged to work
discriminatory and nonmarket licensing practices, and state-
closely with U.S. allies and partners; re-engage with the
funded strategic acquisitions of U.S. assets. The Trump
United Nations; ensure the U.S. military’s competitive edge
Administration then increased tariffs on approximately
over China’s; put democratic values at the center of foreign
$250 billion of imports from China. The PRC countered
policy; and make investments at home in American
and raised tariffs on $110 billion worth of U.S. products.
workers, infrastructure, education, and innovation. National
Most tariffs remain in effect. The United States and China
Security Advisor Jake Sullivan has acknowledged that
signed a phase one agreement in January 2020, in which
forging a common position on China with European allies
China committed to strengthen IP enforcement and remove
will be challenging “because we don’t have entirely aligned
some market barriers, but left most U.S. concerns
perspectives.” Forging a common position with Asian allies
unresolved. China committed to buy $468 billion of U.S.
could be more challenging still, given their proximity to
goods, energy, agriculture, and services over two years. In
China, competing strategic aims and close economic ties.
the first year (2020), its purchases fell short.
The Administration has expressed interest in cooperating
Technology
with China on such issues as climate change, global health,
To address China’s industrial policies that seek global
and non-proliferation. Observers note prior U.S. efforts to
civilian and military leadership in emerging technologies,
cooperate with China at times complicated efforts to
the Trump Administration sought to tighten oversight over
address or counter PRC actions that undermined U.S.
technology transfer to China. It increased scrutiny of
interests. China’s top diplomat, Yang Jiechi, has called for
academic ties, strengthened investment review authorities,
cooperation. He also warned the United States to “respect
tightened export controls, and banned U.S. investment in
China’s positions and concerns” on Taiwan, “stop
firms tied to China’s military. It also banned Huawei, China
interference” in Hong Kong, Tibet, and Xinjiang affairs,
Mobile, and China Telecom from the U.S. market and
and “stop attempts to hold back China’s development,”
encouraged other countries to follow suit. At her
calling those issues “a red line that must not be crossed.”
confirmation hearing, Biden Administration Secretary of
Commerce Gina Raimondo declined to take a position on
Select Issues in U.S.-China Relations
China technology concerns. The White House stated that it
will not let vendors of concern into the U.S. market, but it
Trade and Investment
has not addressed export controls and other restrictions. The
China was the United States’ largest merchandise trading
Treasury Department has stated that it will take six months
partner in 2020, even as U.S. goods imports from China fell
to clarify which Chinese military-tied firms fall under the
by $100 billion between 2018 and 2020. Foreign direct
Trump Administration’s ban. The Biden Administration has
https://crsreports.congress.gov
U.S.-China Relations
also delayed by 90 days a Trump Administration ban on
years. At his confirmation hearing, Blinken said China’s
Russian and Chinese equipment in the U.S. power grid.
imposition of a new national security law on Hong Kong in
June 2020, along with crackdowns on free speech and
Overseas Infrastructure
assembly, “put in tatters the notion of real freedom and
Responding to China’s “One Belt, One Road” program,
autonomy in Hong Kong.” Blinken voiced support for
which seeks to expand China’s global commercial ties and
offering safe haven to those fleeing Hong Kong.
influence, primarily through infrastructure, Congress passed
the Better Utilization of Investments Leading to
Taiwan
Development (BUILD) Act of 2018 (P.L. 115-254) and
Since switching diplomatic recognition from Taipei to
reauthorized the U.S.-Export Import Bank. Trump
Beijing in 1979, the United States has maintained unofficial
Administration efforts to enhance the U.S. ability to finance
relations with self-ruled Taiwan, over which China claims
competitive projects overseas include the Infrastructure
sovereignty and with which China has vowed to unify. On
Technology Assistance Network, the Transaction Advisory
the Biden Administration’s third day in office, the State
Fund, and the Blue Dot Network with Japan and Australia.
Department urged Beijing “to cease its military, diplomatic,
and economic pressure against Taiwan and instead engage
Climate Change
in meaningful dialogue with Taiwan’s democratically
Special Presidential Envoy for Climate John Kerry has
elected representatives” and referred to the U.S.
termed climate change a “critical standalone issue” for
commitment to Taiwan as “rock-solid.” In his written
work with China, while pledging that other issues on which
responses to Senators, Blinken indicated that he would keep
the two countries have differences “will never be traded for
in place his predecessor’s revocation of all State
anything that has to do with climate.” In 2018, China’s
Department-issued guidelines on contacts with Taiwan until
share of global carbon dioxide emissions from fossil fuel
the department completes a review of the most recent
and cement was nearly double that of the United States.
guidelines and finalizes “updated guidance to reflect our
Carbon-intensive projects financed under the One Belt, One
commitment to deepening ties with Taiwan.”
Road initiative also contribute to other countries’ emissions.
East and South China Seas
The COVID-19 Pandemic
In a call with Japan’s Prime Minister, President Biden re-
COVID-19 was first identified in China in late 2019. In
affirmed that the U.S.-Japan Treaty of Mutual Cooperation
2020, the Trump Administration announced a decision to
and Security covers the Senkaku Islands, uninhabited East
withdraw the United States from the World Health
China Sea rocks administered by Japan but also claimed by
Organization (WHO) over concerns about WHO’s
the PRC and Taiwan. Separately, Secretary Blinken told his
interactions with China in the early months of the COVID-
Philippine counterpart that the U.S.-Philippine Mutual
19 pandemic. The Biden Administration has reversed that
Defense Treaty applies to armed attacks against Philippine
decision, signaling that it will seek to address China
armed forces, public vessels, and aircraft in the Pacific,
concerns from within the organization. The White House
including the South China Sea (SCS). Referring to SCS
says it is “imperative to get to the bottom of the early days
sovereignty disputes, Blinken committed “to stand with
of the pandemic in China,” and that it will work with allies
Southeast Asian claimants in the face of PRC pressure.”
to evaluate a WHO investigation’s findings on the matter.
The Biden Administration has also pledged to send U.S.
Fentanyl and Other Synthetic Opioids
public health experts back to China.
China has been a major source of the fentanyl and fentanyl-
related compounds contributing to the U.S. opioid crisis.
China’s Treatment of Muslim Minorities
Under pressure from the United States, China in 2019
On its last full day in office, the Trump Administration
imposed domestic controls on the entire fentanyl class of
issued a determination that China had committed crimes
synthetic opioids, including all known and potential future
against humanity and genocide “against the predominantly
variations of fentanyl. Since then, U.S. law enforcement
Muslim Uyghurs and other ethnic and religious minority
officials have reported an apparent shift in fentanyl
groups” in China’s Xinjiang region. Earlier U.S. actions on
production to include other countries, such as India and
Xinjiang included adding PRC entities to the Department of
Mexico. The U.S. government continues to press China to
Commerce’s Entity List; imposing sanctions on certain
control precursor chemicals used to manufacture fentanyl.
PRC officials and entities; and blocking imports from China
tied to forced labor. At his confirmation hearing, Blinken
Select Legislation in the 116th Congress
said he concurred with the “genocide” determination and
The 116th Congress passed multiple laws related to China,
would review tools available to respond, with a focus on
including standalone legislation on Hong Kong (P.L. 116-
ensuring the United States does not import goods made
76, P.L. 116-77, and P.L. 116-149), Uyghur human rights
with forced labor or export technologies to China that could
(P.L. 116-145), Taiwan (P.L. 116-135), communications
be used for repression.
networks (P.L. 116-124), and fentanyl (P.L. 116-114).
Congress incorporated other major China-related legislation
Hong Kong
into authorization and appropriations acts. The
Hong Kong, a former British colony, reverted to PRC
Consolidated Appropriations Act, 2021 (P.L. 116-260)
sovereignty in 1997 under the provisions of a 1984 treaty in
makes available $300 million for a “Countering Chinese
which China promised the city a “high degree of
Influence Fund” to counter China’s influence globally.
autonomy” and stated that Hong Kong’s “current social and
economic systems” would remain unchanged for at least 50
Susan V. Lawrence, Specialist in Asian Affairs
https://crsreports.congress.gov
U.S.-China Relations
IF10119
Karen M. Sutter, Specialist in Asian Trade and Finance
Disclaimer
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https://crsreports.congress.gov | IF10119 · VERSION 43 · UPDATED