During the George W. Bush Administration, U.S. and People’s Republic of China (PRC) foreign policy calculations have undergone several changes. The Bush Administration assumed office in January 2001 viewing China as a U.S. ”strategic competitor.” After the terrorist attacks of September 11, 2001, U.S. officials came to see Beijing as a potentially helpful ally in the fight against global terrorism, while PRC officials saw the anti-terrorism campaign as a chance to improve relations with Washington and perhaps gain policy concessions on issues important to Beijing, such as on U.S. arms sales to Taiwan. U.S. anti-terror priorities led some to suggest that cooperation against terrorism could serve as a new strategic framework for Sino-U.S. relations. The anti-terrorism agenda helped lead to a new sense of optimism and stability in the U.S.-China relationship, including an impetus for renewed summitry and dialogue, that continues to characterize the relationship in 2004. Despite this period of stability, however, sensitivities have remained over long-standing bilateral issues, including Taiwan, security, and economic ties. The purpose of this report is to provide background for and summarize current developments in U.S.-PRC relations, including current and pending congressional actions involving the PRC.