Front: Summary of Potsdam conference. War News 7 August. Map shows European boundaries as of January 1938. Inset map details administration of eastern Germany and East Prussia. Back: Map of Formosa; inset map shows location of Formosa in Asia.

This report discusses the background information and most recent development in U.S.-China relations since mid-1996. Since the early 1990s, U.S.-China relations have followed an uneven course, with modest improvements overshadowed by various recurring difficulties and setbacks. Longstanding bilateral difficulties have included U.S. problems with the PRC’s worsening human rights record, growing tensions over the PRC’s southern military build-up opposite Taiwan and Taiwan’s political status, and continued controversy over allegations of Chinese proliferation of weapons to unstable regimes.

Members of Congress are concerned about whether U.S. firms have provided technology or expertise to China for use in its ballistic missile program and whether a series of decisions by the Clinton Administration on satellite exports have facilitated legal or illegal transfers of missile-related technology to China. The New York Times reported in April 1998 that the Justice Department is conducting an ongoing criminal investigation into whether Loral Space and Communications (of New York), and Hughes Electronics (of Los Angeles) violated export control laws. The firms are alleged to have shared their findings with China on the cause of a Chinese rocket’s explosion while launching a U.S.-origin satellite in February 1996. In sharing their conclusions, the companies are said to have provided expertise that China could use to improve its ballistic missiles, including their guidance systems. This CRS report provides detailed background information, significant Congressional action, and a comprehensive chronology. The events summarized here, based on various open sources and interviews, pertain to various aspects of U.S. foreign and security policy.