Key Issues > U.S. - China Economic and Military Relations
economy icon, source: PhotoDisc

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.

  1. Share with Facebook 
  2. Share with Twitter 
  3. Share with LinkedIn 
  4. Share with mail 

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.

Economic 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

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.

Military relations

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

All parts GAO received were suspect, counterfeit or bogus

Looking for our recommendations? Click on any report to find each associated recommendation and its current implementation status.

Podcasts

Safety of Imported FoodFriday, February 27, 2015
  • portrait of Kim Gianopoulos
  • portrait of Steve D. Morris
    • Steve D. Morris
    • Director, Natural Resources and Environment
    • morriss@gao.gov
    • (202) 512-3841
  • portrait of John Pendleton
    • John Pendleton
    • Director, Defense Capabilities and Management
    • pendletonj@gao.gov
    • (404) 679-1816