This report is designed to provide Congress with a perspective on the contemporary political system of China, the only Communist Party-led authoritarian state in the G-20 grouping of major economies. China's Communist Party dominates state and society in China, is committed to maintaining a permanent monopoly on power, and is intolerant of those who question its right to rule. The report opens with a brief overview of China's leading political institutions, followed by an introduction to distinct features of China's formal political. The second half of the report is devoted to detailed discussion of China's formal political structures. Also discussed are other political actors who are playing a role in influencing policy debates. The report concludes with a discussion of prospects for political reform.

This CRS report discusses policy issues regarding military-to-mliitary contacts with the People's Republic of China (PRC) and provides a record of contacts since 1993. The United States suspended military contacts with China and imposed sanctions on arms sales in response to the Tiananmen Crackdown in 1989. In 1993, the Clinton Administration began to re-engage the PRC leadership up to the highest level and including China's military, the People's Liberation Army (PLA). Renewed military exchanges with the PLA have not regained the closeness reached in the 1980s, when U.S.-PRC strategic cooperation against the Soviet Union included U.S. arms sales to China. Issues for Congress include whether the current Administration under President Bush has complied with legislation overseeing dealings with the PLA and has determined a program of contacts with the PLA that advances a prioritized list of U.S. security interests.

The continued rise in the U.S.-China trade imbalance and complaints from U.S. manufacturing firms and workers over the competitive challenges posed by cheap Chinese imports have led several Members to call for a more aggressive U.S. stance against certain Chinese trade policies they deem to be unfair, such as China’s policy of pegging its currency (the yuan) to the U.S. dollar. Some Members assert this policy constitutes a form of “currency manipulation” intended to give China an unfair trade advantage and is contributing to the loss of U.S. manufacturing jobs.

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