U.S.-China economic ties have expanded substantially over the past several years. China is now the third largest U.S. trading partner, its second largest source of imports, and its fourth largest export market. However, U.S.-China commercial ties have been strained by a number of issues, including a surging U.S. trade deficit with China, China's refusal to float its currency, and failure to fully comply with its World Trade Organization (WTO) commitments, especially its failure to provide protection for U.S. intellectual property rights (IPR). This report explores these issues in detail, especially concerning the lack of protection for U.S. IPR.

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This report discusses congressional interest in the leadership change and economic transformation underway in China, which has grown substantially over the past two years. Leading congressional concerns focus on how economic conditions in China pose opportunities for U.S. enterprise and how the evolution of conditions in China foster U.S. security, economic, and political interests. Congressional concern with China grew in 1995 as a result of reports of the serious decline in the health of senior Chinese leader Deng Xiaoping.

The President has identified proliferation as a primary danger to U.S. security interests. China has contributed to the danger by providing nuclear weapons technology to Pakistan, and other nuclear technology to Iran and Algeria. China has also supplied CSS-2 intermediate-range ballistic missiles to Saudi Arabia, Silkworm anti-ship missiles to Iran and Iraq, and ballistic missile technology to Pakistan and perhaps Iran, North Korea, and others. China developed the mobile, solid-fuel M-9 and M-11 short-range ballistic missiles reportedly with Pakistan, Syria, and Iran as interested buyers.

This report discusses the Endangered Species Act, the regulation of the Fish and Wildlife Service defining "harm" for purposes of the "take" prohibitions of the Endangered Species Act.

Japan's banking sector currently is carrying between $400 billion and $800 billion in non-performing loans that threaten the solvency of certain financial institutions and weaken the Japanese financial system. This problem is of interest to the United States because the stability of Japan's banking system affects the health of that nation's economy, its rate of economic growth, and international capital flows. This, in turn, may affect American exports to, imports from, and investments in Japan. It also has affected Japanese investments in the United States and may affect the resolution of issues being negotiated or recently agreed to with that nation under the Framework Talks.

Animal protection activists in the United States are seeking modifications (or even curtailment) of many practices long considered acceptable and necessary to animal agriculture. Examples include rearing large numbers of livestock and poultry in close confinement; performing surgery such as tail-docking or beak trimming; housing layer hens in cages; and isolating veal calves in crates.