U.S. - China Economic and Military Relations
China’s rapid growth in the 21st century has had tremendous effects on the global economy and the geo-political order. As such, managing U.S.-China relations going forward will have global repercussions.
A major trend that is changing the world is the growing economic and military strength of China. We’ve reviewed a number of issues related to U.S.-China economic and military relations.
China is a major U.S. trading and investment partner, a fact that underscores the importance of the relationship between these two countries. As policymakers weigh the many, and sometimes competing, factors when shaping this bilateral economic relationship, there are some issues to consider.
- The United States and China have collaborated on research in certain areas. For example, they are the two largest energy consumers, and they invest in renewable resources and have developed some cooperative mechanisms to increase fuel efficiency. However, concerns about potential intellectual property risks to U.S. participants involved in collaborative research projects have persisted.
Examples of Projects under U.S.-China Clean Energy Cooperation Programs
- The interagency Committee on Foreign Investment in the United States reviews certain foreign acquisitions, mergers, or takeovers of U.S. businesses to determine the effect of these transactions on U.S. national security. Acquisitions by Chinese-owned companies accounted for the largest number of transactions reviewed by this committee from 2014 through 2016.
- China’s dominance in global manufacturing also presents issues. For example, there may be national security concerns when parts of federal telecommunications systems, such as the State Department’s critical telecommunications equipment and services, are produced by foreign manufacturers—particularly cyber-threat nations like China.
- Ensuring the safety of food has become increasingly complicated due to globalization. For example, China was the leading exporter of seafood to the United States in 2017—and farmed fish (from China and from other countries) may be treated with antibiotics and other drugs that can leave harmful residues in seafood.
As China develops its military capabilities, it poses particular challenges to the U.S. military.
- The 2018 National Defense Strategy emphasizes that a free and open Indo-Pacific region provides prosperity and security for all. However, China is developing military capabilities that may challenge U.S. access to air, space, cyberspace, and maritime domains. These capabilities can be used to deny the U.S. military’s ability to enter and conduct operations in the region.
- The Department of Defense (DOD) is at risk for receiving counterfeit or fake military-grade electronic parts from its large network of global suppliers, including companies from China. Counterfeit parts can seriously disrupt DOD’s supply chain, harm weapons systems, and endanger troops' lives. We submitted requests for quotes for military-grade electronic parts during the course of our investigation, and purchased 16 parts from vendors in China—all of which we suspected to be counterfeit or fake.
All Parts GAO Received Were Suspect, Counterfeit or Bogus
GAO-19-204SP: Published: Dec 13, 2018. Publicly Released: Dec 13, 2018.
Threats to U.S. national security continue to evolve with technological, economic, and social changes. Federal agencies identified 26 long-term threats within 4 categories: 1) Adversaries' Political and Military Advancements—e.g., China's increasing ability to match the U.S. military's strength. 2) Dual-Use Technologies—e.g., self-driving cars might be developed for private use, but militar...
GAO-18-494: Published: Jul 10, 2018. Publicly Released: Jul 10, 2018.
Foreign investment in U.S. companies can benefit the economy, but could pose risks to national security. The Committee on Foreign Investment in the United States (CFIUS) reviews certain foreign acquisitions and mergers and can mitigate risks or block transactions. DOD identified some investments as national security concerns because they may give foreign investors access to emerging technologies...
GAO-18-249: Published: Feb 14, 2018. Publicly Released: Mar 16, 2018.
Foreign investments in U.S. companies can benefit the economy, but could pose risks to national security. The Committee on Foreign Investment in the United States (CFIUS) reviews certain foreign acquisitions and mergers and can work with the parties involved to mitigate national security risks or block transactions. The committee reviewed over 50% more transactions in 2016 than in 2011. We recom...
GAO-17-443: Published: Sep 15, 2017. Publicly Released: Oct 2, 2017.
Ninety percent of the seafood eaten in the United States is imported, and about half of that is raised on fish farms. Farmers may treat fish with antibiotics and other drugs because these fish can be susceptible to infections. Misuse of drugs can leave residues in seafood that cause health problems for consumers. We looked at how the two agencies charged with ensuring seafood safety protect again...
GAO-17-688R: Published: Jul 27, 2017. Publicly Released: Jul 27, 2017.
Federal telecommunications systems can include a variety of equipment, products, and services which may be produced by foreign manufacturers—and may potentially be vulnerable to manipulation by a cyber-threat nation like China, Iran, North Korea, or Russia. We examined foreign manufacturers of the State Department’s critical telecommunications equipment and services to identify those that mig...
GAO-16-669: Published: Jul 5, 2016. Publicly Released: Jul 5, 2016.
In fiscal years 2008–2015, U.S. agencies obligated a total of about $97 million for clean energy cooperation with China. Two-thirds of this money was obligated for three key programs (projects of which are depicted from left to right below):Department of Energy (DOE) program, the U.S.-China Clean Energy Research Center (CERC), that has focused on research and development in clean coal, clean veh...
GAO-16-236: Published: Feb 16, 2016. Publicly Released: Feb 16, 2016.
Department of Defense (DOD) agencies and contractors submitted 526 suspect counterfeit parts reports in the Government-Industry Data Exchange Program (GIDEP) from fiscal years 2011 through 2015. These were submitted primarily by contractors. Defense agencies and contractor officials explained that congressional attention to counterfeit parts in 2011 and 2012 led to increased reporting, and that th...
GAO-14-801: Published: Sep 10, 2014. Publicly Released: Sep 10, 2014.
The Army and Marine Corps are undertaking multiple efforts to address operational access challenges—challenges that impede a military force's ability to enter and conduct operations in an area—that impact a broad range of their existing missions. For example, they are incorporating operational access challenges into their wargames and revising their service concepts, which inform their assessm...
GAO-12-375: Published: Feb 21, 2012. Publicly Released: Mar 26, 2012.
Suspect counterfeit and boguspart numbers that are not associated with any authentic partsmilitary-grade electronic parts can be found on Internet purchasing platforms, as none of the 16 parts vendors provided to GAO were legitimate. Suspect counterfeit, which applies to the first two categories of parts that were tested, is the strongest term used by an independent testing...