Since the normalization of diplomatic relations with the People’s Republic of China (PRC) in 1979, U.S. trade with China has developed rapidly. In particular, 1980 saw significant developments in the institutional framework of U.S.-China trade relations, with the signing of several new trade-related bilateral agreements and a number of high-level visits in both directions.2 At the same time, China has begun to update its domestic legal system as it plans to integrate more fully into the international economic order.3 The last year has also witnessed the cancellation of certain large development projects, and delay in the implementation of others, as the Chinese readjust their economic plans and priorities. This Perspective will first discuss the current status of U.S.-China trade relations, with an emphasis on the developments of 1980. It will then present our view of the Chinese economy and prospects for the future development of China’s foreign trade. Changes in the Chinese legal system will be mentioned only briefly, as those matters are treated in detail elsewhere in this issue.