The Chinese government is using space power to increase its influence at home and abroad and hopes to leverage the political, economic, and military benefits of space to become a great power. The ambivalent nature of the U.S.-China relationship, however, assures that over the long term China's rise as a space power will present challenges to the United States. Militarily, China's improved remote sensing capabilities and launch tempos require the U.S. military to prepare to counteract China's use of space in a potential conflict over Taiwan. Commercially, China's lower labor costs and mercantilist approach to space could establish China as a competitive market force. Politically, U.S. diplomats must recognize the role Chinese space activities plays in diplomacy and be prepared to ameliorate cooperative activities that impinge on U.S. national security. Despite these drawbacks, cooperation with China cannot be ruled out. Cooperation can improve scientific research, increase safety, and make an opaque program more transparent, but should not directly improve China's military or commercial capabilities. Consequently, the U.S. response to China's rise as a space power should take a balanced approach in which challenges are managed and opportunities exploited.

Is U.S. high-technology manufacturing at risk? In response to the concern that an increasing amount of high-technology manufacturing formerly performed in the United States is now being done overseas, the Office of Science and Technology Policy asked the Rand Corporation to provide analytic support to the President's Council of Advisors on Science and Technology. The support included a description of past and current trends of U.S. high-tech manufacturing, a theoretical and empirical economic analysis of traditional and high-tech manufacturing, and an analysis of U.S. research and development statistics and of trends in choices of academic disciplines.