Congressional interest in the leadership change and economic transformation underway in China has grown substantially over the past few 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 fosters U.S. security, economic, and political interests. Congressional concern with China grew in 1995 and 1996 as a result of reports of the serious decline in the health of senior Chinese leader Deng Xiaoping. Present conditions in China include; A vibrant but sometimes overheated economy, A less divided central political leadership.
Congressional interest in China's transformation has grown. Congressional concerns focus on economic opportunities in China and how conditions there affect U.S. security, economic and political interests.
The Line Item Veto Act of 1996 (P.L. 104-130) authorizes the President to cancel discretionary budget authority, new entitlements, and limited tax benefits. This authority became available on January 1, 1997; will Congress now resort to a variety of techniques and strategies to circumscribe the President's power? Legislators and legislative committees at the state level have used various tactics to counteract, blunt, or neutralize the governor's item-veto power.
In the months approaching China's resumption of sovereignty over Hong Kong on July 1, 1997, policy analysts are trying to assess how the territory will fare under Chinese rule. The answer is important to U.S. interests because of the enormous U.S. economic presence in Hong Kong; because any adverse developments in Hong Kong are likely to affect U.S.-China relations; and because China's promise to give Hong Kong a high degree of autonomy under the "one-China, two-systems" policy has major implications for Taiwan. But given the political situation, the American ability to affect the course of events in Hong Kong seems marginal unless the U.S. decides to confront Beijing more directly. Developments in U.S.-China relations in 1994-1995 suggest Washington might be hesitant to do so.
After several years of relative peace in Central Asia and southern Russia, Islamic extremist movements have become more active in Russia and in Central and South Asia, threatening stability in the region. Although numerous factors might account for the upsurge in activity, several of these movements appear to have connections to the Islamic fundamentalist Taliban regime in Afghanistan. These linkages raise questions about whether the United States, as part of a broader effort to promote peace and stability in the region, should continue to engage the Taliban regime, or strongly confront it. This report will be updated as events warrant.
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