Concerned with Taiwan's growing assertiveness in world affairs, symbolized recently by Taiwan President Lee Teng-hui's June 1995 visit to the United States, Beijing has shifted to a harder line toward Taiwan.

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.