China-U.S. Relations: Current Issues and Implications for U.S. Policy
November 20, 2009 - R40457
The bilateral relationship between the U.S. and the People's Republic of China (PRC) is vitally important, touching on a wide range of areas including, among others, economic policy, security, foreign relations, and human rights. U.S. interests with China are bound together much more closely now than even a few years ago. These extensive inter-linkages have made it increasingly difficult for either government to take unilateral actions without inviting far-reaching, unintended consequences. The Administration of President Barack Obama has inherited from the George W. Bush Administration not only a greater array of policy mechanisms for pursuing U.S.-China policy, but a more complex and multifaceted U.S.-China relationship where the stakes are higher and where U.S. action may increasingly be constrained. Economically, the United States and China have become symbiotically intertwined. China is the second-largest U.S. trading partner, with total U.S.-China trade in 2008 reaching an estimated $409 billion. It also is the second largest holder of U.S. securities and the largest holder of U.S. Treasuries used to finance the federal budget deficit, positioning China to play a crucial role, for good or ill, in the Obama Administration's plans to address the recession and the deteriorating U.S. financial system. At the same time, ...