Congressional Research Service Reports

98018: China-U.S. Relations

Downloaded from the Federation of American Scientists.

Updated June 5, 1998

Kerry Dumbaugh

Foreign Affairs and National Defense Division

SUMMARY

Improvements in U.S.-China relations since mid-1996 have been marred by recent allegations of technology transfer to China by U.S. aerospace companies, continuing controversy over human rights abuses in China, and charges that China is continuing to violate its non-proliferation commitments and helped Pakistan gain nuclear weapons capability. Investigations are also continuing into allegations that the Chinese government was involved in illegal financial contributions to the presidential and other political campaigns in 1996. Meanwhile, both U.S. and Chinese leaders sought to improve the political relationship in 1997. High-level contacts, political dialogue, and presidential summitry resumed during the year, culminating in October 1997 with the visit of Chinese President Jiang Zemin to Washington. President Clinton plans to return the visit with a summit in China in June 1998.

The Clinton Administration continues to favor a policy of "engagement" with China, and in the past year appears to have put a higher priority on, and more effort into, improving U.S.-China relations. Administration officials appear convinced that China has assigned a high priority on good relations with the United States, and that it has made important shifts in its willingness to abide by international agreements, such as deciding to phase out its nuclear cooperation with Iran. Consequently, President Clinton announced, after the October 1997 summit, that he was prepared to move forward on a range of bilateral issues in the coming months, including implementing U.S. nuclear energy cooperation with China under the terms of a nearly moribund 1985 bilateral agreement.

The Clinton Administration's policy of engagement in 1997 continues to be targeted by congressional critics who are pressuring the White House to take a firmer, more sanction-oriented approach to China. As in past years, Members have taken advantage of the annual process of renewing China's most-favored-nation (MFN) status to pressure the Administration for different policy choices. Also as in past years, critics of China's human rights and proliferation policies have introduced measures that would more selectively target sanctions. These have included measures on China's prison system, allegations of coercive abortion, measures involving allegations that China makes weapons sales in violation of its non-proliferation commitments, and others. Congress has also focused on Taiwan -- particularly on its application for membership in the World Trade Organization and on a theater missile defense system for Taiwan. The 105th congress has placed significant emphasis on religious practices in China. Supported by several conservative religious groups, the concern about religious freedom has led to several free-standing bills dealing with this aspect of Chinese policy alone.

Included among the China-related measures introduced in the 105th Congress is a package of 9 bills -- all critical of China -- which the House passed early in November, 1997. In addition to measures involving the issues cited above, these include legislation on cruise missile proliferation to Iran; monitoring the activities of China's military, the PLA; reports on China's intelligence activities; measures involving Tibet; and legislation on Radio Free Asia.

MOST RECENT DEVELOPMENTS

China-U.S. relations have been suddenly complicated in 1998 by nuclear weapons tests conducted by India and Pakistan on May 11 and 28, 1998, respectively. India has termed China one of its chief threats, while the extent of China's secret assistance to Pakistan's nuclear weapons program has been speculated about for years. Congressional committees are also investigating allegations that Loral, a U.S. aerospace company which received a presidential waiver of satellite export restrictions to China, may have provided China with sensitive information in 1996 capable of improving China's missile launch capabilities. Investigations are also ongoing into whether Loral's receipt of the satellite waiver is linked to sizeable campaign contributions to the Democratic National Committee by Loral's CEO. On April 19, 1998, China released a prominent Tiananmen Square dissident, Wang Dan, on medical parole. Wang had been sentenced in 1995 to an 11-year jail term for "subversion." On March 16, 1998, the 54th U.N. Human Rights Commission meeting began in Geneva, Switzerland, to last until April 24. The European Community and the United States have declared that neither will offer a resolution condemning China for human rights abuses. On March 13, U.S. print media reported that the Clinton Administration had discovered China was secretly planning to sell massive quantities of uranium-enrichment material to Iran in violation of its pledge made at the October 1997 U.S.-China summit.

BACKGROUND AND ANALYSIS

U.S.-China relations have been troubled since the 1989 crackdown in Tiananmen Square, with little agreement among policymakers over the appropriate direction of U.S. policy. President George Bush first imposed sanctions on China after Tiananmen, but later sought to protect U.S.-China relations in the face of widespread congressional opposition. Bilateral relations did not improve with the advent of the Clinton Administration, but remained uneven in 1993 and 1994, and by 1995 were deteriorating steadily. By mid-1995, after a private visit to the United States by Taiwan's President, Lee Teng-hui, U.S.-China relations were widely characterized as being at their lowest point since the establishment of the relationship in 1979. Tensions reached their zenith in March 1996 when China conducted ballistic missile exercises off the coast of Taiwan and the United States responded by sending two carrier battle groups to the area. Although bilateral economic relations continue to be strong, improvements in U.S.-China relations since mid-1996 have been marred by continuing controversy over human rights; charges that China continues to violate its non-proliferation commitments, particularly with assistance to Pakistan's nuclear weapons and ballistic missile programs; and allegations that China has received sensitive information from U.S. aerospace companies that could improve its own ballistic missile launch capabilities. Investigations are also continuing into allegations that the Chinese government was involved in questionable financial contributions to the presidential and other political campaigns in 1996. (Although the Senate Committee on Governmental Affairs, chaired by Senator Fred Thompson, completed its investigations into the campaign allegations in February 1998, new information has since come to light.) Meanwhile, both U.S. and Chinese leaders sought to improve the political relationship in 1997 and 1998. High-level contacts, political dialogue, and presidential summitry resumed, including the October 1997 visit of Chinese President Jiang Zemin to Washington, and the planned June 1998 visit by President Clinton to China.

Current Issues in U.S.-China Relations

In the diverse Washington policy community, there is general agreement that the United States should use its influence to help Beijing conform to international norms, and should foster changes in China's political, economic, and security systems that are compatible with U.S. interests. There is less agreement on how the United States should achieve these ends. The Clinton Administration has favored a policy of "engagement" with China, and since early 1997 appears to have put a higher priority on, and more effort into, improving U.S.-China relations. Administration officials appear convinced that China has assigned a high priority to good relations with the United States as well, and that it has made important shifts in its willingness to abide by international agreements, such as deciding to minimize its nuclear cooperation with Iran. Consequently, President Clinton announced, after his October 1997 summit meeting with China's President Jiang Zemin, that he was prepared to move forward on a range of bilateral issues in the coming months, including initiating U.S. nuclear energy cooperation with China under the terms of a nearly moribund 1985 bilateral agreement.

Congressional critics continue to target the Clinton Administration's policy of engagement, pressuring the White House to take a firmer, more sanctions-oriented approach to China. This pressure has increased since April 1998, when it was revealed that Loral, a U.S. aerospace company, may have illegally transferred sensitive information to China in 1996 concerning missile guidance and control systems. Additional pressure is coming from critics who believe that Chinese assistance was a key factor in Pakistan's sudden emergence as a confirmed nuclear power. Some congressional critics are urging the President to cancel his planned June 1998 summit in China, and many more are urging the President to at a minimum avoid the damaging symbolism of being greeted by Chinese leaders in Tiananmen Square, the site of the 1989 bloody military crackdown.

The annual congressional debate over extending China's most-favored-nation (MFN) status ended in 1997 as it has most previous years -- the resolution that would have ended China's MFN status, H.J.Res. 79, was defeated in the House (by a vote of 173-259), making Senate consideration moot. In the current environment, however, consideration of the MFN issue this year promises to be more controversial; on June 2, 1998, the President made his annual recommendation to extend China's MFN status. As in past years, action-oriented critics of China's human rights and proliferation policies have turned to alternatives to MFN status, introducing measures that would more selectively target sanctions and impose other punitive policies.

In addition to the MFN status issue, Congress is likely to spend much of the rest of 1998 investigating the allegations into Loral's alleged transfer of sensitive information, the extent to which China's assistance to Pakistan's nuclear weapons and ballistic missile programs may have violated Chinese non-proliferation commitments, and possible links between Administration decisions on China and illegal Chinese campaign contributions to political candidates in the 1996 elections. On these and other issues, sharp differences have occurred not only between the Democratic and Republican parties, but also within each party, leading to differing policy approaches among Members seeking legislative remedies.

Human Rights Issues

China's human rights abuses have been among the most visible and constant points of contention in U.S.-China relations since the 1989 Tiananmen Square crackdown. China's human rights record since then has presented a mixed picture, with both setbacks and minor improvements providing plenty of ammunition for policy debate. The U.S. State Department's 1997 report on human rights practices painted a somewhat more optimistic view of the human rights situation in China than in previous years, although the report concluded that serious problems remained. In the words of the report, negative aspects of China's human rights record included the following:

.torture and mistreatment of prisoners, forced confessions, and arbitrary arrest and lengthy incommunicado detention. Prison conditions at many facilities remained harsh. The Government continued tight restrictions on freedom of speech, the press, assembly, association, religion, privacy, and worker rights.... Serious human rights abuses persisted in minority areas, including Tibet and Xinjiang, where tight controls on religion and other fundamental freedoms continued and, in some cases, intensified.

There have also been more positive developments in China's human rights record. The Chinese government has signed two key human rights agreements -- the U.N. Covenant on Economic, Social and Cultural Rights (October 27, 1997) and the International Covenant on Civil and Political Rights (March 12, 1998), and has the U.N. Working Group on Arbitrary Detention to visit China. The government also has been allowing "local, competitive elections" in rural areas in China, and has implemented legislation to make political and judicial processes more transparent and to hold law enforcement officials more accountable for their actions. As of 1994, Chinese citizens have been able to sue government agencies for malfeasance and to collect damages.

Chinese Prisons/Prison Labor. Prisons in China are widely criticized for their conditions and their treatment of prisoners. In addition, the requirement that prisoners work is perhaps the central feature of the Chinese prison system. From the standpoint of U.S. policy, the key issue has been the extent to which products made by Chinese prisoners are exported to the U.S. market. Prison labor imports have been a violation of U.S. customs law since 1890 under the McKinley Tariff Act [19 U.S.C., section 1307); criminal penalties also apply under 18 U.S.C., section 1761 and 1762. Because of concerns involving prison labor exports by China, the United States signed a Memorandum-of-Understanding (MOU) with China on the subject in 1992. Since then, there have been repeated allegations that China is failing to adhere to the agreement. Congress is currently considering legislation (H.R. 2195 and H.R. 2358) that address this issue. The effect of the bills would be to increase funding for monitoring of prison labor and prison abuses in China.

Family Planning/Coercive Abortion. Bitter controversies in U.S. population planning assistance have erupted over abortion, and the degree to which coercive abortions and sterilizations occur in China's family planning programs has been a prominent issue in these debates. Chinese officials have routinely denied that coercion is an authorized part of national family planning programs, but they have acknowledged that some provincial and local officials have pursued coercive policies. Direct U.S. funding for coercive family planning practices is already prohibited in provisions of several U.S. laws, as is indirect U.S. support for coercive family planning, specifically in China. In addition, there have been efforts in Congress in recent years to expand these prohibitions to include U.S. funding for international and multilateral family planning programs that are involved in China. Restrictive family planning language concerning China is included in section 1816 of the conference report (H.Rept. 105-432) to H.R. 1757, the Foreign Relations Authorization Act.

Religious Freedom. Membership data on religious organizations in China suggests that the practice of religion continues to increase and the number of religious adherents continues to grow. Nevertheless, Chinese officials decided in 1994 to tighten restrictions on religious practices, and one result has been a marked increase in American criticism. Among other things, new restrictions prohibit evangelical activities and require all religious groups to register with the Religious Affairs Bureau (RAB). Registration requires that religious groups reveal the names and addresses of members, their contacts in China and abroad, and details about leadership activities and finances. The RAB, charged with policing and regulating religious activities, is part of China's State Council and reports to the Communist Party's United Front Work Department.

On February 8, 1998, three U.S. religious leaders began a three-week visit to China to study for themselves the religious situation there. Don Argue, President of the National Association of Evangelicals; Theodore E. McCarrick, Archbishop of the Roman Catholic Diocese of Newark, New Jersey; and Rabbi Arthur Schneier, President of the Appeal of Conscience Foundation, were invited to visit by the Chinese government as a result of discussions between Presidents Clinton and Jiang at the October 1997 summit. The clerics released their report on March 19, 1998. Among other things, they concluded that the number of religious adherents appears to be growing rapidly in China and that China has made some progress over the past 20 years in its policies toward religion. They also found that many in China still regard religion as "potentially threatening" to Chinese social stability, and that the Chinese government maintains intrusive controls over most if not all religious activity. The 105th Congress is considering bills relating to religious freedom in China, including H.R. 967 and H.R. 2431.

Issues in U.S.-China Security Relations

Once one of the stronger linchpins of the relationship, U.S.-China security and military relations have never fully recovered after they were sanctioned following the 1989 Tiananmen Square crackdown.

At the October 1997 summit, Presidents Clinton and Jiang announced they would make modest improvements in military-to-military relations, including an increase in military contacts and agreement on a maritime safety accord meant to reduce the chance of accidents or misunderstandings at sea.

Non-Proliferation. One key security issue for the United States has been China's track record of weapons sales, technology transfers, and nuclear energy assistance, particularly to Iran and Pakistan. Administration officials believe China has taken a number of steps in recent years that suggest it is reassessing its weapons sales and assistance policies. Among other things, China in 1992 promised to abide by the Missile Technology Control Regime (MTCR) and acceded to the Nuclear Non-Proliferation Treaty (NPT). In 1993, China signed the Chemical Weapons Convention (CWC); in 1996, China signed the Comprehensive Test Ban Treaty; and in 1997, China joined the Zangger Committee of NPT exporters. On January 12, 1998, the President signed the required certifications to implement a nuclear cooperation agreement with China, citing that there had been "clear assurances" from China on nuclear non-proliferation issues. The actual U.S.-China Nuclear Cooperation agreement had been signed in 1985, but no cooperation had occurred under the agreement as of 1997, primarily because of concerns over China's proliferation activities.

Congressional critics, however, believe that the Administration's confidence in China's non-proliferation policies is misplaced. They point out that for years, reputable sources have been reporting that China has been selling technology for weapons of mass destruction and ballistic missiles in the international market, primarily to Pakistan and to Middle East countries. Although these allegations have always created problems in U.S.-China relations, the issue has suddenly become a much more serious complicating factor in light of nuclear weapons tests conducted by Pakistan in May 1998 in response to earlier nuclear weapons tests by India (May 11 and 28, 1998). Pakistan's nuclear weapons tests, they say, are positive proof that China has violated its agreements and has assisted Pakistan in its weapons program.

Iran also has been a steady customer of Chinese weapons, making such purchases as small numbers of SA-2 surface-to-air missiles, F-7 combat aircraft, fast-attack patrol boats, and C-802 anti-ship cruise missiles. Some Members of Congress have questioned whether Iran's possession of C-802's violates the Iran-Iraq Arms Non-Proliferation Act of 1992 (U.S.C. 1701), which requires sanctions on countries that sell destabilizing weapons to Iran or Iraq. In light of China's assistance to Pakistan's acquisition of nuclear weapons, congressional critics question China's promises to halt nuclear cooperation with Iran.

Economic Issues/Asia Financial Crisis

China is one of the world's fastest growing economies, and trade analysts agree that its potential as a market will increase significantly in the future. Issues involving trade with China have factored heavily into U.S. policy debates. Between 1991 and 1996, U.S. exports to China increased by 90.5%, while U.S. imports from China surged by 171.4%. The U.S. trade deficit with China has surged accordingly, from a $2.8 billion deficit in 1987 to nearly $50 billion in 1997, making China the second largest deficit trading partner of the United States, after Japan.

Economic and related issues have been a continuing source of tension in U.S.-China relations. China's past ineffectiveness in protecting U.S. intellectual property, its lack of transparent trade regulations, and its high tariff rates all have contributed to these debates. Presidents Clinton and Jiang discussed economic issues at the October 1997 summit. Among other things, the two leaders agreed to intensify talks on China's application to the World Trade Organization (WTO). China has sought membership in the world's international trade agreements since 1986, when Beijing began negotiating to join the General Agreement on Tariffs and Trade (GATT), the WTO's predecessor. China has argued that it has already made substantial economic reforms, and that these should be sufficient to qualify it for WTO membership. For instance, at its 15th Party Congress, which began on September 12, 1997, China announced a reduction in the average tariff rate from 23% to 17%, and announced it would initiate a major restructuring program of its floundering and heavily subsidized state-owned enterprises. The United States has insisted that what China has done so far is insufficient, and that further reforms are necessary prior to China's WTO accession. In addition, U.S. and Chinese leaders left the October 1997 summit having agreed to cooperate in a number of areas, including on environmental and energy issues. In the case of the latter, the United States agreed to begin selling nuclear power equipment to China under the 1985 U.S.-China Nuclear Cooperation Act.

Most-Favored-Nation Status. The annual renewal of China's MFN status continues to remain controversial. Each year by June 3, the President may recommend that Congress renew his authority to waive restrictions on China's MFN eligibility, thus effectively extending MFN status to China for another year. If recommended by the President, the renewal is automatic, and Congress need not act. The renewal can be blocked, however, by enactment of a joint resolution of disapproval within a specified time frame. Although joint resolutions of disapproval have been introduced for China each year since 1990, none has passed both houses. In fact, most of the debate about China's MFN eligibility since 1990 has involved separate legislation which would either place new conditions on China's MFN eligibility, or legislation addressing a range of contentious issues other than MFN.

President Clinton made his recommendation for renewal of China's MFN status on June 3, 1998, setting the stage for another heated debate in Congress. Last year, on June 24, 1997, the House rejected H.J.Res. 79, a resolution disapproving the President's request for an extension of China's MFN status. The vote was 173-259. In the absence of congressional action to the contrary, China's MFN status was automatically extended until July 3, 1998.

Asia Financial Crisis. One economic issue of current concern involves the crisis among Asian financial markets that began in July 1997 with the free fall of the Thai currency, the "baht," in international markets. The baht's fall was followed by sharp declines in the currencies of Indonesia, Malaysia, the Philippines, South Korea, and others. Meanwhile, higher interest rates have slowed economic growth, and Asian stock markets have plummeted, including those of Hong Kong, now part of China. Apart from the implications that the crisis may have for the U.S. economy and for American financial institutions, it also raises serious concerns about the ultimate prospects for China's own rickety banking system. According to leading authorities on China's economy, official Chinese statistics show that a staggering 22% of the total lending of Chinese banks is judged to be in non-performing loans, primarily loans to insolvent state enterprises. (The actual amount is thought to be much higher than what is reported officially.) By comparison, in South Korea, which averted early financial collapse only with the help of a record $60 billion international bailout, the percentage of non-performing loans compared to total bank loans was just over 6%. While China has a number of mitigating factors -- primarily a high savings rate (42%), lots of foreign direct investment, and insultations against currency speculators -- a financial crisis similar to South Korea's in an economy the size of China's could have a significant global impact. In addition, the high percentage of Chinese capital tied up in non-performing loans will make it more difficult for China to make the investments in infrastructure, energy production, and environmental improvements that would contribute to the rate of economic growth China needs to keep pace with its demographic requirements.

Sovereignty Issues: Taiwan, Tibet, Hong Kong

Taiwan. Taiwan undoubtedly remains the most sensitive and complex issue in U.S.-China relations. Beijing has not foresworn the use of force should Taiwan declare its independence from China, and Chinese officials repeatedly block Taiwan's efforts to gain greater international recognition. At the same time, officials in Taiwan are increasingly maneuvering for more international stature and for independent access to multilateral institutions. In 1978, the United States had to break relations with Taiwan in order to normalize relations with Beijing. Since then, U.S. policy toward Taiwan has been shaped by the three U.S.-China communiques and the Taiwan Relations Act (P.L. 96-8), the latter Act also spelling out U.S. interests in assuring Taiwan's security and selling Taiwan defensive weapons. Taiwan poses delicate political problems for American policymakers. Any U.S. action appearing to be either directly or indirectly in support of Taiwan's interests is met with vehement objections by the PRC. Such was the case on May 22, 1995, when the Clinton Administration, under heavy congressional pressure, decided to allow Taiwan's president, Lee Teng-hui, to make a private visit to the United States to attend his college reunion at Cornell. The resulting controversy ultimately led to near-confrontation in the Taiwan Strait in March 1996 after China had conducted a series of live-fire missile exercises off the Taiwan coast and the United States responded by sending two carrier battle groups to the area. Although that confrontation is over, potential controversy over Taiwan still has the potential to disrupt U.S.-China relations.

Tibet. In the late 1980s, Tibet became one of the recurring issues surfacing in U.S.-China relations. A number of factors have contributed to the heightened interest, including: the Dalai Lama's and the Tibetan community's ongoing international political activities; reports of human rights abuses and China's continuing repressive social and political controls in Tibet; and disputes among U.S. policymakers over the direction of U.S. policy toward China. As a matter of official policy, the U.S. government recognizes Tibet as part of China and has always done so, although some dispute the historical consistency of this U.S. position. Since normalization of relations with the PRC in 1979, a succession of both Republican and Democratic U.S. Administrations have favored policies of engagement with China. Thus, they have sought to minimize areas of potential tension with Beijing where Chinese leaders have taken strong positions, such as on the question of Tibet's political status.

But the Dalai Lama has long had some strong supporters in the U.S. Congress, and these Members have continued to put pressure on the White House to protect Tibetan culture and accord Tibet greater status in U.S. law despite Beijing's strong objections. As a result of this congressional pressure, Presidents George Bush and Bill Clinton have each met with the Dalai Lama in the United States -- meetings that were deliberately kept low-key and informal, but which nevertheless offended Chinese leaders. Congress in recent years has attempted to insert language in Foreign Relations Authorizations bills to create a Special Envoy for Tibet, with ambassadorial rank, to promote good relations between the Dalai Lama and Beijing and to handle negotiations with China on the Dalai Lama's behalf. U.S. Administration officials oppose the sovereignty implications of a "Special Envoy" provision. On October 31, 1997, a State Department press statement reported that Secretary of State Albright had designated Gregory B. Craig as a Special Coordinator for Tibetan issues within the State Department -- an added responsibility to his ongoing role as Director of Policy Planning.

Hong Kong. On July 1, 1997, Hong Kong reverted from British back to Chinese sovereignty in a remarkably smooth transition. The former British colony is now known as the Hong Kong Special Administrative Region (SAR) of the People's Republic of China. Also on July 1, 1997, Hong Kong officials swore in the new and controversial provisional legislature, the Beijing-appointed body that temporarily replaced Hong Kong's duly elected Legislative Council (LegCo). On May 24, 1998, new LegCo elections were held under agreements adopted on September 28, 1997, by the provisional legislature.

The election laws used in the May 1998 elections adhered to the major electoral requirements set forward in Sino-British agreements on Hong Kong in that they provided for 20 LegCo members to be directly elected by popular vote; 30 to be elected by "functional constituencies;" and 10 to be chosen by a special Election Committee. Still, the proposals were criticized in the United States because they are excessively complicated and because they dismantled key portions of the electoral reforms put into place in 1995 by Hong Kong's last British Governor, Chris Patten.

Democratic-minded candidates drew heavy public support in the elections, with Martin Lee's Democratic Party winning 13 seats in the 60-seat body, and another 5 or 6 candidates winning from other democratic parties. One surprise in the elections was the record-high voter turnout: Fifty-three percent of Hong Kong's registered voters went to the polls, compared to the previous high of 39% in 1991. Some Hong Kong observers see the high turnout as a sign that Hong Kong citizens favor greater representative government and are dissatisfied with some recent decisions by Hong Kong's Chief Executive, C.H. Tung.

U.S. policy toward Hong Kong is spelled out in the Hong Kong Policy Act (P.L. 102-383), enacted in 1992. Among other things, the Act declares Congress' support for the holding of free and fair elections for Hong Kong's legislature.

U.S. Policy Approaches

Despite recurring sometimes strong friction in U.S.-China relations, many in Beijing see the United States as the key link in the international balance of power affecting Chinese interests. This judgement goes far toward explaining why Chinese leaders in recent years have so avidly sought a visit to China by President Clinton. It would signal to all at home and abroad that the United States has muffled its opposition to, and endorses cooperation with, the Beijing government. Of course, some Chinese leaders remain deeply suspicious of U.S. motives. They believe the U.S. Government is conspiring to weaken and undermine the Chinese leadership and "hold back" or "contain" China from a more prominent position in world affairs.

There is general agreement in the United States that Washington should use its influence to have Beijing conform to international norms and to foster changes over time in China's political, economic, and security systems compatible with U.S. interests. At the same time, there is little agreement in Washington on how the United States should achieve these objectives. In general, there are three approaches influencing U.S. China policy and little indication as to which approach will ultimately prevail.

First is a moderate, "engaged," and less confrontational posture toward China. This is favored by some in the Clinton Administration, Congress, and elsewhere. Some are concerned with perceived fundamental weaknesses in China and urge a moderate approach out of fear that to do otherwise could promote divisions in and a possible breakup of China, with potentially disastrous consequences for U.S. interests in Asian stability and prosperity. Others are impressed with China's growing economic and national strength and the opportunities this provides for the United States. They promote close U.S. engagement with China as the most appropriate way to guide the newly emerging power into channels of international activity compatible with American interests.

Underlying a moderate approach, for some, is a belief that trends in China are moving inexorably in the "right" direction. That is, China is becoming increasingly interdependent economically with its neighbors and the developed countries of the West and is seen as increasingly unlikely to take disruptive action that would upset these advantageous international economic relationships. In addition, greater wealth in China is seen as pushing Chinese society in directions that seem certain to develop a materially better-off, more educated and cosmopolitan populace that will over time press its government for greater representation, political pluralism, and democracy. Therefore, according to this view, U.S. policy should seek to work ever more closely with China in order to encourage these positive long-term trends.

A second approach, held by some U.S. advocates inside and outside of the U.S. Government, encourages U.S. leaders to be less accommodating. Rather than trying to persuade Beijing of the advantages of international cooperation, the United States is advised to keep military forces as a counterweight to rising Chinese power in Asia; to remain firm in dealing with economic, arms proliferation, and other disputes with China; and to work closely with traditional U.S. allies and friends along China's periphery in order to deal with any suspected assertiveness or disruption from Beijing.

Proponents of this policy stress that Beijing officials still view the world as a state-centered competitive environment where power is respected and interdependence counts for little. China's leaders are seen as determined to use whatever means is at their disposal to increase China's wealth and power and as biding their time and conforming to many international norms as China builds economic strength. Once it succeeds with economic modernization, the argument goes, Beijing will be disinclined to curb its narrow nationalistic or other ambitions out of a need for international interdependence or other concerns.

A third approach is based on the premise that the political system in China needs to be changed before the United States has any real hope of reaching a constructive relationship with China. Beijing's communist leaders are inherently incapable of long- term positive ties with the United States. U.S. policy should focus on mechanisms to change China from within while maintaining a vigilant posture to deal with disruptive Chinese foreign policy actions in Asian and world affairs. This view is favored by some U.S. officials and others.

Outlook for U.S. Policy

Given the continued wide range of opinion in the United States over the appropriate U.S. policy toward China, U.S. policy may well continue its recent pattern of trying to accommodate all three approaches. On some issues, such as linking MFN treatment and human rights, the U.S. government has seen U.S. interests best served by an approach that meets PRC concerns. On others, such as intellectual property rights protection and proliferation of missile technology, the United States Government seems prepared to continue to threaten sanctions or to withhold benefits until China conforms to norms acceptable to the United States. Meanwhile, although many U.S. officials would see as counterproductive any declaration by the U.S. Government that a policy goal was to change China's system of government, there is a widespread assumption in the Administration that greater U.S. "engagement" will encourage such desirable changes.

Congressional Actions in 1997-1998

The 105th Congress has been active on issues involving China. Members of the 105th Congress have offered legislation protesting aspects of China's human rights record. These include specific bills dealing with prison conditions and prison labor exports (H.R. 2195, H.R. 2358); measures involving coercive abortion practices (H.R. 2570); measures dealing with China's policies toward religion (H.R. 967, H.R. 2431); and more general human rights legislation (H.R. 2095). An additional set of bills concerns Taiwan -- in particular, offering policy prescriptions about Taiwan's entry into the World Trade Organization (H.Res. 190) and about the U.S. role in helping Taiwan acquire a theater missile defense system (H.R. 2386) to defend itself from military aggression. Also, there is legislation concerning China's missile proliferation activities (H.Res. 188), Radio Free Asia broadcasting to China (H.R. 2232), and China's participation in multilateral institutions (H.R. 1712, H.R. 2605). In addition, Members have introduced legislation to monitor activities of China's military and intelligence services (H.R. 2647, H.R. 2190). Many of these are stand-alone measures. But there are also several multiple-issue bills, such as the Foreign Relations Authorization Act (H.R. 1757), the China Policy Act (S. 1164), and the U.S.-China Relations Act (S. 1303), which combine some, or even most, of these issues.

LEGISLATION

H.R. 3616 (Spence)/S. 2057 (Thurmond)

Defense Authorization Act. Representative Spence's bill authorizes appropriations for the Department of Defense for FY1999. H.R. 3616 was introduced April 1, 1998; referred to National Security Committee, which held a markup May 6, 1998. When the Committee reported the bill out on May 12, 1998 (H.Rept. 105-532), the bill included minimal provisions relating to China: (Section 2822 would eliminate the President's ability to waive prohibitions against sale or lease of the former Naval Station at Long Beach, California, to China.) However, in light of recent revelations that U.S. corporations may have illegally conveyed sensitive satellite and missile technology information to China in 1996, a number of amendments to H.R. 3616 were submitted to the House Rules Committee for consideration on May 19, 1998; 12 of these related to China, and 2 related to Hong Kong. When the Committee reported a rule later the same day, 6 of the proposed amendments had been made in order: Spence/Gilman -- expressing the sense of Congress that U.S. business interests should not be placed above U.S. national security interests, and that the United States should not enter into new agreements with China involving space or missile-related technology; Bereuter -- prohibiting U.S. participation in any investigation of a launch failure of a U.S. satellite in China; Hefley -- prohibiting the transfer of U.S. missile equipment or missile-related technology to China; Hunter -- prohibiting export or re-export of any U.S. satellites to China; and also, placing U.S. satellites on the U.S. Munitions List and making their export subject to Arms Export Control Act licensing requirements; and Gilman -- establishing requirements for nuclear energy-related exports, including provision for joint resolutions of disapproval in Congress for related export licenses.

On May 7, 1998, the Senate Armed Services Committee ordered to be reported an original measure, formally introduced as S. 2057 on May 11, 1998. The Senate began consideration of S. 2057 on May 14, 1998, adopting several amendments relating to China. These included: an amendment (Hutchinson/Abraham) requiring the Secretary of Defense to compile a list of Chinese military companies operating in the United States, and authorizing the President to use IEEPA authority (50 U.S.C. 1702(a)) with respect to any U.S. commercial activity by these entities (the Senate agreed to the amendment by voice vote, after having earlier rejected a motion to table by a vote of 24-76); and an amendment (Hutchinson/Abraham) strengthening the U.S. ability to monitor whether China is illegally exporting to the United States products made with prison-labor (as amended by a Harkin amendment to include "child labor" into the definition of forced labor in U.S. law. The latter were both passed by voice vote. The Senate is expected to resume consideration of S. 2057 the week of June 15, 1998.

H.R. 1757 (Gilman)

Foreign Relations Authorization Act, FY1998-FY1999. Authorizes appropriations for State Department activities and consolidates foreign affairs agencies of the United States. The House passed the bill on June 11, 1997, by voice vote. The Senate passed a differing version the same day by a vote of 90-5. As approved by the House, Section 1305 of the bill would create a Special Envoy for Tibet, with the rank of ambassador and charged with promoting negotiations between the Dalai Lama and China; Section 1523 would prohibit the United Nations Population Fund (UNFPA) from using U.S. funds for population programs in China; Section 1713 of the bill expresses the sense of Congress that Hong Kong's reversion to China should be peaceful, and that basic freedoms and rule of law should be respected; Section 1722 declares that Congress favors public U.S. support for Taiwan's accession to the WTO. As passed by the Senate, the bill has language similar to that of the House bill regarding a Special Envoy to Tibet, and contains sense of the Senate language on a range of U.S. policy issues with respect to China, including limiting visas to Chinese officials involved in restricting religious practices or in China's coercive abortion programs; limiting U.S. contributions to the multilateral development banks; imposing targeted sanctions on certain Chinese PLA enterprises; and increasing U.S. funding for Radio Free Asia. On June 19, 1997, a message on the Senate action was sent to the House. On March 10, 1997, the conference report was filed (H.Rept. 105-432). The House agreed to the Conference Report by voice vote on March 26, 1998, having first agreed to the rule (H.Res. 385) by a vote of 234-172. The Senate agreed to the Conference Report on April 28, 1998, by a vote of 51-49, and cleared it for White House action.

H.R. 2358 (Ros-Lehtinen)

Political Freedom in China Act. Would authorize $2.2 million in FY1998 and $2.2 million in FY1999 to provide the U.S. Embassy and consulates in China with increased personnel to monitor prison abuses and political repression in China. As passed by the House, the bill includes a package of Committee amendments, including amendments condemning China's alleged sale for transplant of human organs harvested from executed prisoners (Rep. Linda Smith); authorizing $10 million for the National Endowment for Democracy to promote rule of law and civil society in China (Representatives Porter/Dreier/Matsui); and drawing attention to the plight of Tibetan prisoners (Representative Abercrombie). In addition, the House passed by a vote of 394-29 the Gilman/Markey amendment, which amended the original 1985 U.S.-China nuclear cooperation agreement in two ways: by extending from 30 days to 120 days the time Congress has to consider a proposed nuclear cooperation agreement; and by establishing expedited procedures for congressional consideration of a resolution of disapproval for a proposed nuclear sale. The House passed the final amended bill on November 5, 1997 (416-5). The bill was referred to the Senate Foreign Relations Committee on November 7, 1997.

S.Res. 187(Mack)/H.Res. 364 (C. Smith)

S.Res. 187, introduced March 3, 1998, urges the United States to introduce at the annual Geneva meeting of the U.N. Commission on Human Rights a resolution criticizing China for its human rights abuses in China and Tibet. The Senate Foreign Relations Committee ordered the measure to be reported favorably and without amendment on March 11, 1998. On March 12, 1998, the Senate passed S.Res. 187 by a vote of 95-5. A similar resolution, H.Res. 364, was introduced in the House by Representative Smith on February 12, 1998. The House measure was marked up by the Subcommittee on International Operations on February 25, and by the Subcommittee on Asia/Pacific Affairs on March 5. The full Committee held hearings on March 10, and the measure was passed by the House on March 17, 1998 (397-0).

CHRONOLOGY

06/04/98 --The House International Relations Committee and House Government Reform Committee held a joint hearing on allegations that it is Chinese policy to sell for transplant human organs harvested from executed prisoners.

06/03/98 --President Clinton recommended that China's MFN status be extended for another year.

05/28/98 --In response to nuclear tests by India, Pakistan detonated 5 nuclear devices. The United States declared it would impose sanctions, as required by U.S. law. Sanctions involve cutting off all direct U.S. aid and withdrawing U.S. backing for international lending.

05/11/98 --India exploded three underground nuclear devices, ultimately exploding two more. They were the first nuclear weapons tests India had conducted since 1974. The United States declared it would impose sanctions, as required by U.S. law. Sanctions involve cutting off all direct U.S. aid and withdrawing U.S. backing for international lending.

05/11/98 --India exploded three underground nuclear devices. It was India's first nuclear weapons test since 1974.

04/19/98 --Chinese authorities released Wang Dan, a prominent Tiananmen Square student demonstrator, from prison on medical parole because of recurrent headaches. Wang had been sentenced in 1995 to an 11-year sentence for "subversion" for continuing to press openly for democracy.

04/17/98 --According to The Washington Post, Chinese authorities had detained two Catholic priests -- the Rev. Shi Wende, on March 14, and the Rev. Lu Genyou, on April 5 -- because of their association with "underground churches" in northern Hebei Province.

04/14/98 --Ending a three-year freeze in relations, Chinese and Taiwanese negotiators agreed to resume low-level negotiations on April 21-22.

04/13/98 --According to a New York Times front-page article, a classified May 1997 report by the U.S. Department of Defense had concluded that scientists from Hughes and Loral Space and Communications had turned over scientific expertise to China that had significantly improved the reliability of China's nuclear missiles.

03/16/98 --The 54th U.N. Human Rights Commission meeting began in Geneva, Switzerland, to last until April 24. The European Community and the United States declared that neither would offer a resolution condemning China for human rights abuses.

03/13/98 --According to U.S. news reports, the Clinton Administration recently discovered that China was secretly planning to sell massive quantities of uranium-enrichment material to Iran in violation of its pledge made at the October 1997 U.S.-China summit.

03/12/98 --China's Foreign Minister, Qian Qichen, announced that China would sign the International Covenant on Civil and Political Rights, one of two key U.N. human rights treaties. China signed the second key treaty, the U.N. Covenant on Economic, Social, and Cultural Rights, on October 27, 1997, a day prior to the U.S.-China summit in Washington.

03/12/98 --The Senate Foreign Relations Committee held a closed door session on U.S. nuclear cooperation with China.

03/12/98 --The Washington Post reported that President Clinton would visit China in June 1998 rather than waiting, as had been expected, until late November when an Asia Pacific Economic Cooperation (APEC) forum meeting was scheduled.

03/12/98 --The Senate passed, by a vote of 95-5, S. Res. 187, a resolution urging the United States to introduce a resolution condemning China for its human rights record before the U.N. Commission on Human Rights.

03/05/98 --The House International Relations Committee's Asia/Pacific Subcommittee marked up H.Res. 364, urging the United States to introduce a resolution condemning China's human rights practices, at the 54th Session of the U.N. Commission on Human Rights in Geneva (March 16 - April 24, 1998).

03/04/98 --The House Governmental Reform and Oversight Committee held hearings on allegations that China and other countries tried to influence U.S. policies and elections. Attorney General Janet Reno was among those who testified.

02/08/98 --Don Argue, President of the National Association of Evangelicals; Theodore E. McCarrick, Archbishop of the Roman Catholic Diocese of Newark, New Jersey; and Rabbi Arthur Schneier left for China to study for themselves the religious situation there. The three religious representatives were invited to China as a result of discussions at the October 1997 U.S.-China summit.

02/04/98 --The House International Relations Committee held a hearing on the President's certification to initiate nuclear energy cooperation with China.

01/12/98 --Pursuant to section (b)(1) of P.L. 99-183 and section 902(a)(6)(B)(i) of P.L. 101-246, President Clinton made the certification necessary for U.S.-China nuclear cooperation to begin.

12/29/97 --Hong Kong began slaughtering 1.3 million chickens in an effort to prevent an avian flu pandemic traced to chickens in the territory.

12/20/97 --U.S. Secretary of Defense William Cohen, speaking during his trip to Beijing, said that President Jiang Zemin had assured him that China would not transfer additional anti-ship cruise missiles to Iran.

11/16/97 --Wei Jingsheng, China's most famous dissident, was released from a Chinese prison on medical parole and sent to the United States for medical treatment. He was serving a 14-year term when he was released.

10/31/97 --A State Department press statement reported that the Secretary of State had designated Gregory B. Craig as Special Coordinator for Tibetan issues within the State Department -- an added responsibility to his ongoing role as Director of Policy Planning.

10/28/97 --U.S.-China Summit. President Jiang Zemin became the first Chinese leader to visit the United States since 1985. Issues discussed at the summit included weapons proliferation, Asia-Pacific security, the trade imbalance, legal and political reforms, human rights, and peaceful nuclear cooperation. President Clinton announced after the summit that he was prepared to initiate nuclear energy cooperation with China under the 1985 U.S.-China Nuclear Cooperation Act.

10/27/97 --China signed the U.N. International Covenant on Economic, Social, and Cultural Rights, and indicated that it would put the signed agreement before the National People's Congress for study and action.

10/03/97 --USIA Director Joseph Duffey left for a visit to New Delhi, Beijing, and Moscow.

09/25/97--Treasury Secretary Robert Rubin met with Chinese President Jiang Zemin and Economic Advisor, Zhu Rongji in Beijing to discuss the upcoming state visit of Jiang and China's economic policies.

09/24/97 --China warned the United States and Japan not to include Taiwan under the security umbrella of the new U.S.-Japan Mutual Defense Treaty. 09/12/97 --The 15th National Party Congress commenced in Beijing.

09/08/97 --Secretary of Commerce William Daley left for China to attend the U.S.-China Joint Commission on Commerce and Trade (JCCT) September 8-9, and the China America Telecommunications Summit (CATS), September 10-11

09/04/97 --During the visit of Japan's Prime Minister, Ryutaro Hashimoto, to China, the two countries agreed to exchange visits of heads of government annually. . 08/17/97 --National Security Advisor Sandy Berger held talks in Beijing with President Jiang Zemin on ways of ensuring a successful US-China Summit in October 1997. One U.S. human rights proposal suggested that China release political prisoners Wang Dan and Wei Jingsheng for health reasons.