Factbox: Google complaints add to list of Sino-U.S. disputes

(Reuters) - Internet giant Google's January 12 threat to quit China, citing cyber attacks and tightening censorship, could add to strains between Beijing and the United States, already at odds over currency, trade and Taiwan.

With the two giant nations joined at the hip economically, Sino-U.S. tensions are unlikely to escalate into outright confrontation, but could make cooperating on global economic and security issues all the more difficult.

Here are the main sources of tension:

CURRENCY AND DEBT

The United States complains that China keeps its currency artificially undervalued, thus giving its exporters an unfair advantage.

China has unofficially pegged its currency to the dollar since mid-2008, meaning its currency has weakened against other trade partners as the value of the dollar has slid.

Beijing is concerned the value of its dollar holdings could be eroded by massive debt issuances to fund the U.S. stimulus.

China held $798.9 billion in U.S. Treasuries at end-October, displacing Japan in September 2008 as the largest foreign holder.

TRADE AND INVESTMENT

China is requesting the World Trade Organization open a dispute panel over U.S. duties on tires, after the United States for the first time imposed safeguard duties China had agreed to when it joined the WTO.

Other trade disputes center around steel products, poultry, Chinese tariffs on raw materials exports, and quality and safety concerns over Chinese-made food, toys and other goods that Chinese manufacturers view as a type of protectionism.

U.S. firms investing in China complain about intellectual property theft, murky regulations, corruption and unfair advantages enjoyed by domestic rivals.

China complains about investment barriers on the U.S. side, citing resource investments blocked on national security grounds.

In 2008, U.S. exports to China totaled $69.7 billion, but were dwarfed by $337.8 billion in exports from China to the United States, now Beijing's second biggest trade partner.

DIPLOMATIC AND MILITARY INFLUENCE

As China has grown to the world's third largest economy it is gaining greater clout, especially in Asia and Africa.

It is also upgrading its military and space capability, and Washington has said Beijing should be more open about its defense spending and strategic intentions.

China, however, remains wary of the United States' global military dominance. U.S. patrols in waters China considers its exclusive zone led to minor incidents last year. In 2001 a U.S. spy plane was forced to land in China after colliding with a Chinese fighter.

China hosts stalled six-party talks seeking to end North Korea's nuclear weapons program. But China has also sought to bolster bilateral tries with North Korea.

Washington wants China's stronger cooperation in pressuring North Korea, as well as Iran, over their nuclear activities.

Taiwan also remains a sore point. Beijing has never renounced the use of force to bring self-ruled and democratic Taiwan, which it considers its sovereign territory, under its rule. The United States says it has an obligation to help the island defend itself, and its weapons sales to Taiwan have drawn growing ire from Beijing.

INTERNET

U.S. Internet firms have fared poorly in China, which censors content and blocks many foreign websites, including popular social media such as Twitter and Facebook.

On January 12, Google announced it was no longer willing to continue censoring Internet search results in China, and might pull out of the country party because of cyber attacks on its corporate infrastructure.

U.S. Secretary of State Hillary Clinton on Thursday called on China to openly and thoroughly investigate the cyber attacks and made a broad case for Internet freedom, arguing in part that nations that censor may ultimately crimp their growth.

"We stand for a single Internet where all of humanity has equal access to knowledge and ideas," said Clinton in a major address that cited China, Iran, Saudi Arabia and Egypt among countries that censored the Internet or harassed bloggers.

American corporations and military strategists are increasingly concerned over skilled attacks by Chinese hackers, which they fear threaten corporate and national security.

(Reporting by Lucy Hornby in Beijing and Arshad Mohammed in Washington)