Dear Senator Hatch and Speaker Ryan:
On behalf of the U.S.-China Economic and Security Review Commission, we are pleased to transmit the Commission’s 2018 Annual Report to Congress. This Report responds to our mandate “to monitor, investigate, and report to Congress on the national security implications of the bilateral trade and economic relationship between the United States and the People’s Republic of China (PRC).” The Commission reached a broad and bipartisan consensus on the contents of this Report, with all 11 members (one appointment remains vacant) voting unanimously to approve and submit it to Congress.
In accordance with our mandate, this Report, which is current as of October 9, includes the results and recommendations of our hearings, research, travel, and review of the areas identified by Congress in our mandate, as defined in Public Law No. 106–398 (October 30, 2000), and amended by Public Laws No. 107–67 (November 12, 2001), No. 108–7 (February 20, 2003), No. 109–108 (November 22, 2005), No. 110–161 (December 26, 2007), and No. 113–291 (December 19, 2014).
The Commission’s charter, which includes the 11 directed research areas of our mandate, is included as Appendix I of the Report. The Commission conducted six public hearings and one public roundtable, taking testimony from 56 expert witnesses from government, the private sector, academia, think tanks, research institutions, and other backgrounds. For each of these hearings, the Commission produced a transcript (posted on our website at http://www.uscc.gov). This year’s hearings and roundtable included:
• China’s Belt and Road Initiative: Five Years Later;
• China’s Military Reforms and Modernization: Implications for the United States;
• China, the United States, and Next Generation Connectivity;
• China’s Relations with U.S. Allies and Partners in Europe and the Asia Pacific;
• China’s Role in North Korea Contingencies;
• China’s Agricultural Policies: Trade, Investment, Safety, and Innovation; and
• U.S. Tools to Address Chinese Market Distortions.
The Commission received a number of briefings by executive branch agencies and the Intelligence Community, including both unclassified and classified briefings on China’s military modernization, China’s defense and security activities in the Indo-Pacific, China’s relations with Northeast Asia, China’s cyber activities, Chinese threats to the Department of Defense’s supply chain, China’s focus on megaprojects, U.S. critical telecommunications infrastructure, and money laundering. The Commission is preparing a classified report to Congress on these and other topics. The Commission also received briefings by foreign diplomatic and military officials as well as U.S. and foreign nongovernmental experts.
Commissioners made official visits to Taiwan and Japan to hear and discuss perspectives on China and its global and regional activities. In these visits, the Commission delegation met with U.S. diplomats, host government officials, business representatives, academics, journalists, and other experts. Since its establishment, the Commission has had productive visits to China. Recently, the PRC government has been unable to support these visits, which affects the Commission’s ability to fully assess issues in country.
The Commission also relied substantially on the work of our excellent professional staff and supported outside research (see Appendix IV) in accordance with our mandate (see Appendix I).
iv 2018 REPORT TO CONGRESS OF THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION
The Report includes 26 recommendations for congressional action, which appear at the conclusion of the Executive Summary.
We offer this Report to Congress in the hope that it will be useful for assessing progress and challenges in U.S.-China relations.
Thank you for the opportunity to serve. We look forward to continuing to work with Members of Congress in the
upcoming year to address issues of concern in the U.S.-China relationship
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