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China: U.S. Economic Sanctions

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Publication Date: October 1997

Publisher(s): Library of Congress. Congressional Research Service

Series: 96-272

Topic: Economics (Economic relations)

Coverage: China


The use of sanctions as a foreign policy tool to bring states into conformity with certain international norms, whether on human rights, nonproliferation, aggression, or a number of other issues, plays a central and controversial part in current U.S. foreign policy debates. Much of the authority to impose, waive, or lift sanctions rests with the President. In the case of the People's Republic of China, however, Congress has played an active part in constructing the U.S. sanction regime and, given current tensions, will probably examine the issue of U.S.-China relations in the coming months. To provide a context for such debate, this paper presents a post-World War II history of U.S. economic sanctions imposed against the People's Republic of China. It highlights sanctions currently active and lists occasions on which those restrictions have been waived.

After more than 20 years of nearly nonexistent U.S.-China relations, the process of normalization began in 1971 when trade and travel restrictions were eased. Full diplomatic relations were established in 1979, and a trade agreement was reached the same year. The following decade was one of increasing, but cautious, cooperation and trade.

Relations deteriorated rapidly in 1989, however, when the Chinese government aggressively suppressed a foundling pro-democracy movement. In June, when Chinese authorities cracked down on students in Beijing holding peaceful demonstrations in Tiananmen Square, the United States began to recraft its policies toward China and to consider imposing new sanctions. In the wake of the Tiananmen crackdown, the United States suspended arms trade, military exchanges, support in international financial institutions, Overseas Private Investment Corporation and Trade and Development Agency funding, and export licenses for satellites, U.S. Munitions List items and crime control items.

Since 1989, U.S.-China relations have seesawed between cooperation and confrontation. Human rights, arms proliferation, the status of Taiwan and Tibet, and the use of prison labor for export goods, all have given cause to continue sanctions. As well, trade issues--intellectual property rights and Chinese markets closed by tariffs and other restrictions--raise the specter of trade sanctions.