International Trade:

U.S. Government Policy Issues Affecting U.S. Business Activities in China

GGD-94-94: Published: May 4, 1994. Publicly Released: May 16, 1994.

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Pursuant to a congressional request, GAO reviewed U.S. policies and programs that affect U.S. business activities in China, focusing on: (1) factors affecting the U.S.-China trade relationship; (2) U.S. and international programs that promote bilateral trade and support Chinese economic development; (3) U.S. policies that may decrease U.S. business opportunities in China; and (4) U.S. efforts to balance its economic, human rights, security, and other interests in 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.

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