A new report assessing a range of trade and economic issues affecting Sino-U.S. relations concludes China is undermining U.S. national security by continuing to export goods including missile technology, to nations accused of supporting terrorism. Congress is being urged to toughen regulations regarding technology transfers or else see China emerge as an increasing threat to U.S. interests around the world.

Despite promises made to the United States, this report to be made public Monday, concludes China has not stopped exporting goods that can be used to make weapons of mass destruction to countries Washington accuses of supporting terrorism. China's huge trade surplus with the United States is funding policies which this report says run directly counter to American interests.

Arthur Waldron helped write what is known as the U.S.-China Security Review. "It is very nearly a consensus document, of Democrats and Republicans," he said.

Based in part on secret intelligence briefings, this bipartisan commission faults U.S. policies as failing to adequately address China's effort to acquire, sometimes through industrial espionage, advanced U.S. technology, allowing its military to improve its strategic weapons. "There are a lot of enterprises in China that are not really businesses at all. They are military or security organizations that are simply obtaining a flow of nourishment from this growing commerce," said Mr. Waldron.

One recommendation the report makes is for the United States to continue denying China cooperation in satellite launches until an effective export control system is put in place. Another is for the United States to better monitor all American investment in China financial and otherwise. The President, it says, should also be given more leverage to punish Beijing when promises are not honored.

China is now a member of the World Trade Organization and with an expanding pro-Western, capitalistic economy, it's also a huge American market. Yet it's a nation whose political future and foreign policy motives are both far from certain. This report warns American policy makers to be prepared for all possible contingencies. "China is a work in progress. We don't know even what the next leadership is going to look like," he said. "It doesn't really have a legal system. There's never been a succession in China that wasn't determined ultimately by military force. Yet on the other hand it is increasingly important economically and it is engaged in what can only be described as a military buildup."

This review was created to replace the annual congressional debate that used to accompany a decision on whether to grant Beijing preferential trade status.

The commission's report will be released to Congress Monday. It will then be up to lawmakers and the President to decide whether to adopt its recommendations for dealing with a bilateral relationship which it calls increasingly one of the United States' most important yet troubling.