US-China Commission Report - Fatal System Error

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RECOMMENDATIONS • The Commission recommends that Congress encourage the administration to monitor the transboundary environmental impacts of China’s energy consumption and to report on the effects of China’s air pollution on air quality in the United States. • The Commission recommends that Congress encourage the administration to seek from China more complete reporting of the economic and environmental effects of China’s energy use and to enhance cooperation with China in collecting information about those effects, especially in collecting data on China’s carbon dioxide emissions. • The Commission recommends that Congress urge the administration to implement fully the goals of the 10-year energy and environmental cooperation framework that was signed with China during the fourth meeting of the Strategic Economic Dialogue in June 2008. • The Commission recommends that Congress encourage the administration to seek greater opportunities for public-private cooperation in the development and deployment of clean coal technology and carbon capture and sequestration technology in the United States and in China. • The Commission recommends that Congress urge the administration to establish a bilateral dialogue with China to discuss strategies to reduce carbon dioxide emissions, especially from coal-fired power plants, and to mitigate the effects of climate change. • The Commission recommends that Congress encourage the administration to work with China toward a mutually acceptable multilateral solution for adoption in international climate change negotiations. • The Commission recommends that Congress urge the administration to press China to reduce or eliminate in a timely fashion its tariffs on environmental goods and services so as to encourage the import of clean energy and pollution control technologies into China. (220)
221 ENDNOTES FOR CHAPTER 3 1. U.S.-China Economic and Security Review Commission, Hearing on China’s Energy Policies and Their Environmental Effects, testimony of Katharine Fredriksen, August 13, 2008. 2. International Energy Agency, World Energy Outlook 2007: China and India Insights (OECD/IEA, 2007), p. 262. The IEA makes annual projections in its World Energy Outlook using a large-scale mathematical model known as the World Energy Model. Most of the data used in the generation of projections comes from IEA’s own statistical database, recognized as one of the most comprehensive sources for energy statistics, and from a wide variety of other sources. 3. U.S.-China Economic and Security Review Commission, Hearing on China’s Energy Policies and Their Environmental Effects, testimony of Joanna Lewis, August 13, 2008. 4. Trevor Houser et al., Leveling the Carbon Playing Field: International Competition and U.S. Climate Policy Design (Peterson Institute for International Economics and the World Resources Institute, Washington, DC: 2008), p. 62. 5. International Energy Agency, World Energy Outlook 2007: China and India Insights (OECD/IEA, 2007), p. 262. 6. International Energy Agency, World Energy Outlook 2007: China and India Insights (OECD/IEA, 2007), p. 294. 7. U.S.-China Economic and Security Review Commission, Hearing on China’s Energy Policies and Their Environmental Effects, testimony of Joseph Aldy, August 13, 2008; ‘‘China tightens its grip on exports,’’ Metal Bulletin Monthly, April 2008. Nexis.com; ‘‘China denies US report of subsidies to steel makers,’’ Xinhua, February 20, 2008; BBC Monitoring Asia Pacific—Political. Nexis.com; See Usha C.V. Haley, ‘‘Shedding Light on Energy Subsidies in China: An Analysis of China’s Steel Industry 2000–2007,’’ Alliance for American Manufacturing, January 8, 2008, for a discussion of subsidies for the steel industry. 8. U.S.-China Economic and Security Review Commission, Hearing on China’s Energy Policies and Their Environmental Effects, testimony of Katharine Fredriksen, August 13, 2008. 9. International Energy Agency, World Energy Outlook 2007: China and India Insights (OECD/IEA, 2007), p. 291. 10. The World Bank, ‘‘An Overview of China’s Energy Transport Sector—2007’’ (Washington, DC: December 19, 2007), p. 49. www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2008/03/13/00033303820080313080100/Rendered/ PDF/427980WP0CHA0T10Box0327331B1PUBLIC1.pdf. 11. U.S.-China Economic and Security Review Commission, Hearing on China’s Energy Policies and Their Environmental Effects, testimony of Katharine Fredriksen, August 13, 2008. 12. International Energy Agency, World Energy Outlook 2007: China and India Insights (OECD/IEA, 2007), p. 297. 13. International Energy Agency, World Energy Outlook 2007: China and India Insights (OECD/IEA, 2007), p. 262; U.S. Energy Information Administration, ‘‘China Energy Profile.’’ http://tonto.eia.doe.gov/country/countrylenergyldata.cfmfips=CH. 14. International Energy Agency, World Energy Outlook 2007: China and India Insights (OECD/IEA, 2007), p. 262; U.S. Energy Information Administration, ‘‘China Energy Profile.’’ http://tonto.eia.doe.gov/country/countrylenergyldata.cfmfips=CH. 15. International Energy Agency, World Energy Outlook 2007: China and India Insights (OECD/IEA, 2007), p. 262. 16. International Energy Agency, World Energy Outlook 2007: China and India Insights (OECD/IEA, 2007), p. 44. 17. International Energy Agency, World Energy Outlook 2007: China and India Insights (OECD/IEA, 2007), cited in U.S.-China Economic and Security Review Commission, Hearing on China’s Energy Policies and Their Environmental Effects, testimony of Katharine Fredriksen, August 13, 2008. 18. International Energy Agency, World Energy Outlook 2007: China and India Insights (OECD/IEA, 2007), pp. 117–118. 19. Edward S. Steinfeld, ‘‘Energy Policy,’’ in Shahid Yusuf and Tony Saich, eds., China Urbanizes: Consequences, Strategies, and Policies (The World Bank, Washington DC: 2008), p. 133. 20. U.S. Energy Information Administration, ‘‘China: Coal,’’ last updated August 2006. http://www.eia.doe.gov/eme/cabs/China/Coal.html. 21. For 2007, coal imports totaled 51.02 million tons, and exports totaled 53.17 million tons, with net exports totaling 2.15 million tons. ‘‘China’s coal imports grow 34 percent in 2007,’’ Xinhua, January 19, 2008; International Energy Agency, World Energy Outlook 2007: China and India Insights (OECD/IEA, 2007), p. 265.
Page 1 and 2:
USCC 2008 ANNUAL REPORT
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1 2008 REPORT TO CONGRESS of the U.
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U.S.-CHINA ECONOMIC AND SECURITY RE
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CONTENTS Page TRANSMITTAL LETTER TO
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INDEX OF TABLES AND FIGURES 2008 RE
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2 economic, security, diplomatic, a
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4 China’s Capital Investment Vehi
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6 • Antidumping penalties imposed
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8 rities of other nations and cause
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10 Conclusions China’s Current En
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12 other countries that rely on Chi
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14 vein, there appears to be a stro
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16 lator of all financial services
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18 • Identifying substandard ship
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20 During the year, China continued
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22 U.S. inspections of prisons to e
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24 to the uncertainty during the su
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26 U.S. exports to China were 20 pe
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28 currency for RMB to obtain forei
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30 of supply and demand in the fore
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32 troversial is whether the treaty
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34 erty (IP) rights holders from en
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36 New Currency Rules China’s und
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38 brought in 2006 by the United St
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40 sectoral talks on farm trade. In
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42 tinue buying foreign exchange, t
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44 difference between temporary, th
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46 The Administrative Structure and
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48 U.S. dollar and has appreciated
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50 Development Committee and other
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52 drawn some fairly conventional l
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54 demonstrates the great length to
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56 cent revelations of the activiti
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58 of China by way of the investmen
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60 Ltd. attempted to acquire the U.
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62 not be applied necessarily in th
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64 economy—from ports and telecom
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66 asset allocations, benchmarks, a
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68 the investments, viewing them as
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70 and printed circuits in order to
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72 2006, R&D spending in China from
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74 tios—two of Asia’s technolog
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76 The last time the United States
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78 pendent players. However, this m
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80 aviation industry and has a role
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SECTION 4: A CASE STUDY OF THE LOCA
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85 The rise of industrial fish farm
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87 According to the Southern Shrimp
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89 the increasing import base. The
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91 nated fish are discovered after
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93 At the time this Report was comp
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95 port with the hope it will be ad
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97 Restaurants also are exempted by
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99 entire dusted product is from Ch
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101 written and approved, which is
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RECOMMENDATIONS The U.S.-China Trad
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105 gress could enable consumers to
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107 26. ‘‘China Central Bank to
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109 82. USTR, ‘‘2008 National T
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111 121. U.S.-China Economic and Se
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113 173. ‘‘China’s Stake in B
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117 282. International Working Grou
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121 361. Food & Water Watch, ‘‘
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123 Louisiana and the U.S. Gulf Coa
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126 While witnesses concluded that
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128 China’s Nonproliferation Comm
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130 State during the interdiction o
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132 Northwest National Laboratory
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134 UN Security Council resolutions
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136 ployment, this change would inf
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138 ing Iran’s missile program on
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SECTION 2: CHINA’S VIEWS OF SOVER
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142 ficing the principle behind it.
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144 baseline. Other states enjoy ov
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146 India, Vietnam, Taiwan, and oth
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148 as, ‘‘What constitutes a sp
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150 The proposed PAROS treaty itsel
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152 enhance China’s assertions of
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154 Media and Public Opinion Warfar
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SECTION 3: THE NATURE AND EXTENT OF
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158 Today, China’s space program
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160 The Management Structure for Ch
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162 • Launching geostationary orb
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164 bility to conduct cyber operati
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166 tions between the NIPRNet and t
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RECOMMENDATIONS China’s Prolifera
Page 180 and 181: 170 ENDNOTES FOR CHAPTER 2 1. U.S.-
Page 182 and 183: 172 41. U.S.-China Economic and Sec
Page 184 and 185: 174 80. Janice E. Thomson, ‘‘St
Page 186 and 187: 176 112. Reinhard Drifte, ‘‘Jap
Page 188 and 189: 178 149. U.S.-China Economic and Se
Page 193 and 194: CHAPTER 3 CHINA’S ENERGY AND ENVI
Page 195 and 196: 185 A growing share of energy deman
Page 197 and 198: 187 pleted. Without the discovery a
Page 199 and 200: 189 A Survey of China’s Interests
Page 201 and 202: 191 projects that imports of natura
Page 203 and 204: 193 and design of the units. 71 Chi
Page 205 and 206: 195 dioxide, nitrous oxide, mercury
Page 207 and 208: 197 sions are realized and producti
Page 209 and 210: 199 ferent interests that motivate
Page 211 and 212: 201 the oil, gas, coal, and power i
Page 213 and 214: 203 fluential figures in business a
Page 215 and 216: 205 The Terminology Used to Describ
Page 217 and 218: 207 velop international and domesti
Page 219 and 220: 209 that growth must occur in an en
Page 221 and 222: 211 servation. Officials highlighte
Page 223 and 224: 213 grated Gasification Combined Cy
Page 225 and 226: 215 Obtaining sufficient movement f
Page 227 and 228: 217 nology and finding ways to make
Page 229: 219 • As the negotiations for a p
Page 233 and 234: 223 tent.aspxdata=EmergingMktlconte
Page 235 and 236: 225 13, 2008. These tools include s
Page 239 and 240: 229 ergy Group, Environmental Energ
Page 241 and 242: CHAPTER 4 CHINA’S FOREIGN ACTIVIT
Page 243 and 244: 233 China will seek to displace the
Page 245 and 246: 235 China to help resolve them. 22
Page 247 and 248: 237 presenting itself as an accepta
Page 249 and 250: 239 China’s infrastructure invest
Page 251 and 252: 241 IMF. The Angolan government exp
Page 253 and 254: 243 China’s Conventional Arms Sal
Page 255 and 256: 245 Kurlantzick testified that Chin
Page 257 and 258: 247 pendent of their legislatures a
Page 259 and 260: 249 diplomacy and in the internatio
Page 261 and 262: SECTION 2: CHINA’S RELATIONSHIPS
Page 263 and 264: PART 1: TAIWAN The Significance of
Page 265 and 266: 255 PRC pressure directed against T
Page 267 and 268: 257 this end. 150 (Additional infor
Page 269 and 270: 259 Discussions Regarding Arms Sale
Page 271 and 272: 261 ernment is committed to set ann
Page 273 and 274: 263 • Arms purchases from the Uni
Page 275 and 276: 265 China, appreciation of the RMB,
Page 277 and 278: 267 Days later, although they did n
Page 279 and 280: Introduction PART 3: THE REPUBLIC O
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271 South Korean officials emphasiz
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273 mount among the ROK’s diploma
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275 Even after approving these grad
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277 exercising undue influence—be
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RECOMMENDATIONS China’s Expanding
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281 ENDNOTES FOR CHAPTER 4 1. U.S.-
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283 42. UN Conference on Trade and
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285 87. U.S.-China Economic and Sec
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287 134. Calculation performed by C
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289 184. ‘‘Factbox: Key facts o
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CHAPTER 5 CHINA’S MEDIA AND INFOR
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293 The central role of the Propaga
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295 thoritarian post-Soviet governm
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297 Some of the measures taken by C
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299 Images of ‘‘Jing-Jing’’
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301 Legislation was introduced duri
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303 In addition to promoting a powe
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305 Chinese Government Restrictions
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307 search engine and the servers s
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309 media, the Internet, popular en
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311 ENDNOTES FOR CHAPTER 5 1. David
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313 image-of-internet-police-jingji
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315 90. U.S.-China Economic and Sec
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318 China’s prison labor system,
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320 most literal sense, the term la
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322 treatment of Falun Gong practit
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324 lowing its signing. According t
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326 granted just three of 18 prison
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328 Mr. Marck, who is the partial o
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330 complaints involving internatio
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RECOMMENDATIONS • The Commission
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334 28. U.S. Department of Homeland
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COMPREHENSIVE LIST OF THE COMMISSIO
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339 gram. By expanding this volunta
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341 27. The Commission recommends t
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343 43. The Commission recommends t
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345 ADDITIONAL VIEWS OF COMMISSIONE
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347 ADDITIONAL VIEWS OF COMMISSIONE
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APPENDIX I UNITED STATES-CHINA ECON
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351 (iii) make all subsequent appoi
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353 (2) Information. The Commission
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355 In each Section and Subsection
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357 ecutive Schedule under section
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360 member of the Academic Advisory
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362 nomic, defense, and foreign pol
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364 formulated by the Committee suc
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366 Commissioner Shea is an attorne
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368 than twenty years, leaving his
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APPENDIX III PUBLIC HEARINGS OF THE
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373 May 20, 2008: Public Hearing on
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APPENDIX IIIA LIST OF WITNESSES TES
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377 Alphabetical Listing of Panelis
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379 Alphabetical Listing of Panelis
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382 REPUBLIC OF KOREA, JAPAN AND TA
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APPENDIX V LIST OF U.S. SANCTIONS I
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387 Date Imposed Entity/Person Cont
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APPENDIX VII ABBREVIATIONS AND ACRO
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393 UNGA UN PKO USD USDA USITC USTR
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