U.S. President Donald Trump returned to Washington on Monday to authorize an inquiry into China's alleged theft of intellectual property, a step that analysts say is aimed at pressuring Beijing into a negotiated settlement to revise its practices. Trump broke from his 17-day vacation in New Jersey to sign a presidential memorandum at the White House, set for 3 p.m. The order will instruct U.S. Trade Representative Robert Lighthizer to look into whether to investigate China's trade policies on intellectual property, which the White House says are harming U.S. businesses and jobs. The action is likely to escalate tensions with Beijing at a time when Washington has asked for its help on North Korea. "Much work to do. Focus on trade and military," Trump said on Twitter in reference to the upcoming announcement. (in.reuters.com)

China's policy of forcing foreign companies to turn over technology to Chinese joint venture partners and failure to crack down on intellectual property theft have been longstanding problems for U.S. administrations. Although Trump constantly criticized China's trade practices on the campaign trail, his administration has not taken direct action against Beijing. It declined to name China a currency manipulator and has delayed broader national security probes into imports of foreign steel and aluminum that could indirectly affect China. In an editorial on Monday, the state-run newspaper China Daily said the investigation will "poison" relations and warned the Trump administration not to make a rash decision it could regret. The investigation could take up to a year, according to administration officials, opening the door to a settlement before a possible investigation is launched. (in.reuters.com)

The Trump administration is expected to annouce a Section 301 investigation under the 1974 Trade Act into China’s taking of intellectual property from U.S. firms. Once the investigation is complete, a number of sanctions might result, including tariffs on Chinese imports and barring Chinese companies from doing business in the United States. This investigation should be part of a thorough review of U.S.-China trade, which is long overdue. Since the 1950s, promoting trade has been a dominant feature of the global economy. Many believe trade has been the most important determinant of America’s rising, wealth, and power. Mainstream American politicians, on the left or the right, who may be worlds apart ideologically, socially, and fiscally, mostly agree trade is good for America. But the U.S.-China trade has brought about a series of negative consequences for the United States. Since China joined the World Trade Organization, China has gained a staggering $3.5 trillion dollars from the United States through trade, according to the U.S.-China Economic and Security Review Commission. That is a net loss of $3.5 trillion dollars for America. (ntd.tv)

China warns US against 'trade war'

Strong US-China trade relations

In the area of trade, according to statistics from the Chinese Customs, bilateral trade in 2011 reached US$446.7 billion, an increase of over 180 times from the beginning of diplomatic relations. China and the U.S. are the second largest trading partner for each other. The U.S. is China’s second largest export market and sixth largest source of import. China is the third largest export market and the largest source of import for the U.S. It has been the fastest growing export market of the U.S. for 10 consecutive years. Based on U.S. statistics, U.S. exports to China grew by 468% between 2000 and 2010 while its exports to its other trading partners only grew by 55% during the same period. In the area of investment, the U.S. is one of the largest sources of foreign investment. In 2011 alone, China approved 1,426 new U.S. businesses in China. By the end of 2011, the U.S. had invested in 61,000 projects in China with a total paid-in value of US$67.59 billion. Since 2005, Chinese investment in the U.S. has been growing at a rapid pace. Currently, non-financial Chinese direct investment in the U.S. has exceeded US$6 billion, covering industry, science & technology, clothing, food processing and other areas. Chinese companies have opened 1,600 businesses in the U.S., hiring 15,500 local employees. (china-embassy.org)

China and the U.S. have put in place a number of dialogue mechanisms to oversee their economic and trade relations, including the Sino-U.S. Joint Economic Committee in 1979, the JCCT since 1983, the Strategic Economic Dialogue (SED) launched in 2006, and the S&ED as of 2009. Since 2009, Chinese Vice Premier Wang Qishan and U.S. Treasury Secretary Timothy Geithner have co-chaired four rounds of Economic Dialogues under the framework of S&ED, which have produced concrete results on 218 items covering wide ranging areas such as macroeconomic policy, finance, trade, investment, international rules and global economic governance. These dialogue mechanisms have played a significant role in building a sound and stable economic and trade relationship. China is ready to work with the U.S. to properly handle the issues and disputes in their economic and trade relations, expand collaboration in trade, investment, new energy and infrastructure, and promote bilateral business ties to greater depth, breadth and scope. It is hoped that the U.S. would accommodate China’s concerns when reforming the U.S. export control regime, promote the export of civilian high-tech products to China, and take concrete steps to provide a fair and hospitable environment for Chinese investment in the U.S. (china-embassy.org)