International Trade

With one of the world's fastest growing economies and a population of 1.2 billion, the People's Republic of China is becoming an increasingly important player in the world trading system. In light of this development, GAO reviewed major U.S. government programs and policies that either promote or hinder U.S. business activities in China. This report identifies (1) factors contributing to the growing importance of the U.S.-China trade relationship, (2) U.S. government and international programs promoting bilateral trade and supporting the development of China's economy, and (3) U.S. government policies that may decrease U.S. business opportunities in China. GAO also discusses how the United States is trying to balance its economic, human rights, security, and other interests in its relationship with China.

GAO found that: (1) since 1970, China has made significant efforts to liberalize its economic and trade policies and encourage private enterprise; (2) U.S.-China bilateral trade and U.S. business investments in China have grown significantly; (3) China's economic development strategy presents opportunities for U.S. trade and investment in industries where U.S. companies are competitive; (4) a number of U.S. agencies and multilateral lending institutions have programs that support China's economic development, oversee China's compliance with international trade policies, and facilitate U.S. business activities; (5) most public and private sector officials consider the uncertainty surrounding the annual renewal of China's most-favored-nation (MFN) trade status as the most important issue affecting U.S.-China economic relations; (6) the United States needs to evaluate the impact of approving or revoking MFN status on its foreign policy, security, economic, and human rights interests in China; (7) many U.S. companies have expressed concern that unilateral and multilateral export controls and the limited availability of federal business funding hinder U.S. business activities in China; and (8) the United States needs to balance its conflicting trade, human rights, technology transfer, and nonproliferation policies if its business and trade promotion efforts are to succeed.