In the next 20 years, China could surpass Japan as the world's second largest trading nation, and between 2020 and 2030 the People's Republic of China could emerge as the world's biggest economy. To do so, however, China must continue to liberalize its economy, establish a modern financial system with a sound currency, and conform to international norms for protecting property rights. The United States should help move China in the direction of greater economic and personal freedom by adopting a consistent, long-run policy that normalizes trade relations, integrates China into the global trading order, and promotes exchange on a broad front.

Congress should uphold the principle of free trade and defend human rights; trade sanctions should be used only in extreme cases and only when they have a high chance of success. Too often well-intended sanctions end up harming the parties they were designed to help and delaying real reform.

The U.S. policy of engagement has been sucessful and should be continued and deepened. Congress should not let the bilateral trade deficit with China interfere with that strategy. Any movement away from freer trade and toward protectionism would only delay China's progress toward freedom and prosperity and harm the global economy.

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