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...Taiwan The democratic, self-governed island is one of Beijing's most important foreign policy considerations. It puts a huge amount of effort into diplomatically isolating Taiwan, which Beijing considers Chinese territory that should be reunified by force if necessary. China maintains an estimated 1,300 ballistic missiles along the Taiwan Strait to be used against the island in event of war. While the U.S. does not have formal diplomatic relations with Taiwan, it remains its biggest ally and protector. Under the Taiwan Relations Act, U.S. law requires that it sell military hardware to provide for Taiwan's defense, which...

Author: /time Magazine | Title: Five Things the U.S. and China Still Disagree On | 11/16/2009 | See Source »

...Those relations resumed in October when Xu Caihou, vice chairman of China's Central Military Commission, visited Washington. "Xu went to America and talked to Obama about arms sales," says Yan Xuetong, director of the Institute of International Studies at Tsinghua University in Beijing. "But the arms sales will continue because of the Taiwan Relations Act. That shows that they can talk nicely, but can't reach an agreement...

Author: /time Magazine | Title: Five Things the U.S. and China Still Disagree On | 11/16/2009 | See Source »

...Military Relations Over the past 10 years, military incidents have shown the greatest potential for sending Sino-U.S. relations into an unanticipated tailspin. The U.S. bombing of the Chinese embassy in Belgrade in 1999 and the collision of a U.S. spy plane with a Chinese fighter near China's southern Hainan Island in 2001 both sharply increased tensions between the two sides. This March, Chinese vessels confronted a U.S. Navy surveillance ship that was surveying an area about 75 miles off Hainan, an area many nations consider international waters but China claims as part of its exclusive economic zone...

Author: /time Magazine | Title: Five Things the U.S. and China Still Disagree On | 11/16/2009 | See Source »

...China's defense spending has increased by an annual average of 16% over the past 10 years, and on Oct. 1 the government marked the 60th anniversary of the founding of the People's Republic with a massive military parade. U.S. officials often question why China feels its military requires such a sustained modernization program, and a Pentagon report in March said that a lack of transparency from the Chinese side "poses risks to stability by creating uncertainty and increasing the potential for misunderstanding and miscalculation." China rejected the U.S. report as "groundless" criticism and an effort to stir...

Author: /time Magazine | Title: Five Things the U.S. and China Still Disagree On | 11/16/2009 | See Source »

...Currency During his confirmation hearings in January, U.S. Treasury Secretary Tim Geithner accused China of manipulating its currency, driving down the value of the renminbi to make Chinese exports cheap. That provoked a furious response from Beijing, and since then Geithner has toned down his message. While he expressed a belief commonly held by economists, an official finding of currency manipulation by the U.S. government would trigger negotiations with China and possibly duties on Chinese imports. In October, the Treasury Department said that the renminbi was undervalued, but that China was not a currency manipulator...

Author: /time Magazine | Title: Five Things the U.S. and China Still Disagree On | 11/16/2009 | See Source »

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