The leader of the Chinese Communist Party, Mao Zedong, founded the People`s Republic of China on October 1 in Beijing after peasant-backed Communists defeated Chiang Kai-shek`s nationalist government. Chiang and thousands of his troops are fleeing to Taiwan. The United States – which supported the nationalists during World War II against the invasion of Japanese troops – supports the exiled government of the Republic of China from Chiang to Taipei, thus staging decades of limited U.S. relations with mainland China. Domestic coverage of the trade war is censored in China. While news agencies are allowed to cover the conflict, their reports are subject to restrictions; The South China Morning Post reported that Chinese media employees were ordered not to ”overestimate” the trade war, while a New York Times article reported that state news agencies had tried to promote the official line, with the authorities limiting the use of the term ”trade war.”  Social media posts about the conflict are also subject to censorship.  A U.S. court is charging five Chinese hackers with alleged links to the People`s Liberation Army of China for stealing commercial technology from U.S. companies.
In response, Beijing suspended its cooperation in the U.S.-China Cyber Security Working Group. In June 2015, U.S. authorities reported that there was evidence that Chinese hackers were behind the office of Personnel Management`s large online violation and the theft of data from 22 million current and formal federal employees. An article in the December 2018 review published by two Chinese academics indicated that, in the worst-case trade war, China would suffer a 1.1% decline in employment and a loss of 1% of GDP, which they said would be negligible but manageable for China.  Another paper published by Chinese academics in February 2018 also concluded that the United States would suffer significant social losses as a result of the trade war, but that China could easily lose or gain depending on the impact of the trade war on the trade balance between the United States and China.  Details of the basic approach to mapping the 2020 annual targets on trade data are available in Bown (2020). Other hypotheses relate to the establishment of estimates for 15 different product categories, as the agreement provides only aggregate targets for the four sectors of manufacturing, agriculture, energy and services. The aim is to allocate product-level targets on the basis of the share of this product in all U.S. exports to China in 2017 of products covered by purchase obligations. See also the table below.
The United States and China have several unresolved issues regarding bilateral trade between the two countries. The trade deficit between China and the United States increased significantly, with the volume of imports from China growing much faster than U.S. exports to China. This large trade deficit has been a problem for both economists and policy makers.