China continues to support countries that undermine international security and “appeared to sponsor numerous computer network intrusions throughout 2011,” according to the commission’s annual report. The report also concluded that the United States is a prime funder of China’s growing wealth.

“This is a serious indictment of our massively flawed relationship with Beijing, and both Congress and the administration urgently need to address these issues,” AAM Executive Director Scott Paul said in a press release.

The commission cited a record $273 billion U.S. trade deficit with China in 2010, which “now accounts for more than 50 percent of the total U.S. trade deficit with the world.”

China now holds foreign currency reserves in excess of $3 trillion, three times higher than the next largest holder of foreign currency reserves, Japan.   

One key factor in China’s booming trade surplus is its policy of currency undervaluation.  The commission found that over the preceding 12 months, its currency, the yuan, has appreciated by 6 percent, but economists estimate that it “remains substantially undervalued.”

To access the full report, go to www.americanmanufacturing.org/files/USCC%202011%20REPORT.pdf