{ "id": "RL30757", "type": "CRS Report", "typeId": "REPORTS", "number": "RL30757", "active": false, "source": "EveryCRSReport.com", "versions": [ { "source": "EveryCRSReport.com", "id": 102033, "date": "2000-11-20", "retrieved": "2016-05-24T20:32:09.455941", "title": "China's Emergence as a Major Economic Power: Implications for U.S. Interests", "summary": "China's likely development as a major economic power over the next quarter century holds\nimportant implications for U.S. interests. Assuming a continuation of current trends, by 2025 China\nis likely to become a medium income economy with an estimated $3.5 trillion to $5.8 trillion gross\ndomestic product and a 1.5 billion population. An optimistic view of China in 2025 is for it to be\nwell integrated into the world economy with global standards for trade, investments, finance, labor,\nand the environment and with a booming investment and trading relationship with the United States\nconducted in a peaceful world environment. A pessimistic view is that, in 2025, China with a huge\nand powerful economy and globally competitive industries would be presided over by a politically\nauthoritarian regime with a modern military that views the United States as the enemy and with a\ngovernment that poses a formidable threat to U.S. interests. The actual China in 2025 will probably\ncontain elements of both these extremes.\n Chinese economic prosperity depends on its internal micro- and macroeconomic policies and\nreforms. It also depends on access to markets, foreign capital and technology of the United States\nand other countries of the world. In recent years, China's economic ties with the U.S., in effect, have\nresulted in an annual gain of some $60 billion for China from its bilateral trade surplus and direct\nforeign investment. Any major conflict between the two countries could jeopardize China's\neconomic modernization and undermine its internal stability as well as its international status.\n Rising Chinese demand for resources, particularly food and energy, as incomes rise and\npopulation grows and becomes more urbanized may become a source of conflict. China could seek\nto assert its claims to disputed islands in the East and South China Sea for their resource and military\nvalue. The U.S. could be drawn into these territorial disputes. The status of Taiwan also could\nbecome a source of conflict as Beijing has not ruled out the use of force in dealing with Taiwan.\n With rapidly rising incomes, China could devote more resources to its military, but in view of\ngrowing domestic needs, military spending is likely to continue to take second place to economic\nexpansion and modernization. Even if the military share of GDP remains constant, however, China's\nmilitary spending could rise from about $30-35 billion in 1998 to a projected $135 billion to $225\nbillion by 2025.\n The Clinton Administration (as did the Bush Administration) has pursued a basic policy of\n\"engagement\" with China along with restrictions on exports of military and certain high-technology\nexports in response to Chinese activities deemed threatening to U.S. security. The \"engagement\"\npolicy is based on a view that economic reforms and growth will make China less of a threat to U.S.\ninterests. Those opposed to \"engagement,\" seek a stiffer and less accommodating U.S. position\ntoward China. This is based on a view that a China with greater economic and military power would\nincreasingly threaten U.S. interests. Both sides in the policy debate would have the United States\napply firm pressures and maintain a strong military presence as a counterweight to rising Chinese\npower in Asia.", "type": "CRS Report", "typeId": "REPORTS", "active": false, "formats": [ { "format": "PDF", "encoding": null, "url": "http://www.crs.gov/Reports/pdf/RL30757", "sha1": "f900651676b27710a0281c13e43b36f3b1771be7", "filename": "files/20001120_RL30757_f900651676b27710a0281c13e43b36f3b1771be7.pdf", "images": null }, { "format": "HTML", "filename": "files/20001120_RL30757_f900651676b27710a0281c13e43b36f3b1771be7.html" } ], "topics": [] } ], "topics": [ "Economic Policy", "Foreign Affairs", "Industry and Trade", "National Defense" ] }