In the months following China's 1989 Tiananmen Square crackdown, both the President and the Congress took a number of initiatives protesting Beijing's actions. These initiatives centered around U.S. concerns related to trade, human rights, and non-proliferation. In intervening years, the United States has periodically imposed, lifted, or waived other sanctions and concluded several trade-related agreements with China relating to these concerns. Those measures that remain in place in 1994 are detailed in the accompanying tables.

It has been suggested recently that most-favored-nation (MFN) status be extended to China permanently by determining that it is no longer a nonmarket economy (NME) country and thus removing China from the purview of the freedom-of-emigration waiver of the Jackson-Vanik amendment, required for the annual renewal of the MFN status of NME countries.

On May 26, 1994, President Clinton announced he was recommending that MFN status be extended to China for another year despite Beijing's failure to meet the human rights conditions set forward in his Executive Order of the previous year (Executive Order 12850). In addition, the President announced he was taking additional steps with respect to China, including: maintaining U.S. sanctions imposed as a result of the events in Tiananmen

This report discusses the background information and most recent development in U.S.-China relations since mid-1996. The relations also have been marred by continuing allegations of Chinese espionage, ongoing controversy over human rights, charges that China continues to violate its non-proliferation commitments, controversy over the accidental NATO bombing of the Chinese Embassy in Belgrade, and renewed tensions over Taiwan. The report describes current issues in U.S.-China relations such as; Human Rights Issues, Issues in U.S.-China Security Relations, Economic Issues, and Sovereignty Issues: Taiwan, Tibet, Hong Kong.

Since the violent military crackdown around Tiananmen Square, most Western observers have struggled to understand and explain three major questions concerning the Chinese situation: first, why a forward-looking and reform-minded Chinese leadership chose such violent force over a more accommodating approach toward the peaceful public protests of June 1989; second, how to assess current political and economic conditions in China in light of Tiananmen Square; and third, what the events of the last two years mean for China's future prospects.