To impose certain restrictions on trade with and investment in the People's Republic of China, and for other purposes.

Summary: China Democracy Act - Prohibits, with specified exceptions, the import of products from the People's Republic of China (PRC) into the United States or the export of goods or technology from the United States to the PRC.

Prohibits persons from the United States from: (1) making investments in PRC enterprises or enterprises owned or controlled by the PRC government, entities controlled by the PRC government, or by PRC nationals; or (2) engaging in any transaction to secure an investment by a Chinese national in any U.S. person or any enterprise owned or controlled by a U.S. person.

Prohibits entry into the United States, for a specified period, of vessels engaged in trade with the PRC.

Subjects violators of this Act to certain penalties.

Prohibits the issuance of visas to PRC nationals. Suspends visas issued to PRC nationals before the effective date of this Act.

Requires the President to take the necessary steps to downgrade diplomatic relations with the PRC.

Terminates this Act upon certification by the President that the PRC has: (1) met certain democratic, civil liberties, and human rights principles; and (2) established a market-oriented economic system.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``China Democracy Act''.

SEC. 2. RESTRICTIONS ON TRADE WITH AND INVESTMENT IN THE PEOPLE'S 
              REPUBLIC OF CHINA.

    (a) Restrictions on Trade.--
            (1) In general.--Subject to paragraph (2), no article that 
        is the product of the People's Republic of China may be 
        imported into the United States, and no goods or technology may 
        be exported from any place in the United States to the People's 
        Republic of China.
            (2) Exception.--Paragraph (1) shall not apply to--
                    (A) exports of food or medicine to the People's 
                Republic of China; or
                    (B) exports of items that would be authorized for 
                export to Cuba, except that such items shall be subject 
                to the same restrictions relating to licenses or other 
                approval that apply with respect to exports of such 
                items to Cuba.
    (b) Restrictions on Investment in Chinese Enterprises.--No United 
States person may, after the end of the 180-day period beginning on the 
date of the enactment of this Act, make an investment in any enterprise 
in the People's Republic of China or in any enterprise that is owned or 
controlled by the Government of, entities controlled by the Government 
of, or nationals of, the People's Republic of China.
    (c) Restrictions on Investment by Chinese Nationals in U.S. 
Persons.--No United States person may, after the end of the 180-day 
period beginning on the date of the enactment of this Act, engage in 
any transaction the purpose of which is to secure an investment by a 
Chinese national in any United States person or in any enterprise owned 
or controlled by United States persons.

SEC. 3. ENTRY OF VESSELS ENGAGED IN TRADE WITH THE PEOPLE'S REPUBLIC OF 
              CHINA.

    (a) Prohibitions.--Except as specifically authorized by the 
President, by means of regulations, rulings, instructions, licenses, or 
otherwise --
            (1) no vessel that enters a port or place in the People's 
        Republic of China to engage in the trade of goods or the 
        purchase or provision of services, may enter a port in the 
        United States for the purpose of loading or unloading freight 
        for a period of 180 days after the date on which the vessel 
        departed from a port or place in the People's Republic of 
        China; and
            (2) no vessel carrying goods to or from the People's 
        Republic of China or carrying goods in which the People's 
        Republic of China or a national of the People's Republic of 
        China has an interest may enter a port in the United States 
        with such goods on board.
    (b) Exception.--Subsection (a) shall not apply with respect to 
exports of items permitted under section 1.

SEC. 4. ENFORCEMENT.

    (a) Regulatory Authority.--The President shall issue such 
regulations, orders, and licenses as are necessary to carry out this 
Act.
    (b) Exceptions From Prohibitions.--The President may provide for 
such exceptions from the prohibitions contained in this Act as are 
consistent with the Cuban Assets Control Regulations under part 515 of 
title 31, Code of Federal Regulations, as in effect on the date of the 
enactment of this Act.

SEC. 5. PENALTIES.

    Any person or entity that violates this Act or any regulation, 
license, or order issued under this Act shall be subject to the 
penalties provided in section 206 of the International Emergency 
Economic Powers Act (50 U.S.C. 1705) for violations under that Act.

SEC. 6. SUSPENSION OF VISAS TO CHINESE NATIONALS.

    No immigrant or nonimmigrant visa may be issued to any national of 
the People's Republic of China, and any such visa issued to a national 
of the People's Republic of China before the effective date of this Act 
may not be extended on or after such effective date.

SEC. 7. DOWNGRADING OF DIPLOMATIC RELATIONS.

    The President shall take the necessary steps to downgrade 
diplomatic relations with the People's Republic of China to that which 
existed before the United States recognized the People's Republic of 
China in 1979.

SEC. 8. DEFINITIONS.

    In this Act:
            (1) Food.--The term ``food'' means--
                    (A) any article used for food or drink for humans; 
                and
                    (B) any article used for a component of an article 
                described in subparagraph (A).
            (2) Investment.--The term ``investment'' means any 
        contribution or commitment of funds, commodities, services, 
        patents, processes, or techniques, in the form of--
                    (A) a loan,
                    (B) the purchase of a share of ownership,
                    (C) participation in royalties, earnings, or 
                profits,
                    (D) the furnishing of commodities or services 
                pursuant to a lease or other contract, or
                    (E) other mechanism,
        that is made for the production of income.
            (3) Medicine.--The term ``medicine'' has the meaning given 
        the term ``drug'' in section 201 of the Federal Food, Drug, and 
        Cosmetic Act (21 U.S.C. 321).
            (4) National of the people's republic of china.--The term 
        ``national of the People's Republic of China''--
                    (A) means--
                            (i) a citizen of or person owing allegiance 
                        to the People's Republic of China;
                            (ii) any corporation, partnership, or other 
                        entity organized under the laws of the People's 
                        Republic of China; and
                            (iii) any entity owned or controlled by 
                        persons or entities described in clause (i) or 
                        (i); and
                    (B) does not include any citizen or person owing 
                allegiance to Taiwan, the Pescadores, or any other 
                island over which the Taiwanese Government exercises 
                control.
            (5) People's republic of china.--The term ``People's 
        Republic of China''--
                    (A) includes mainland China, Hong Kong, Macao, and 
                any other territory or special administrative region 
                governed by the People's Republic of China; and
                    (B) does not include Taiwan, the Pescadores, or any 
                other island over which the Taiwanese Government 
                exercises control.
            (6) United states.--The term ``United States'' includes any 
        commonwealth, territory, or possession of the United States, 
        and the customs waters of the United States (as defined in 
        section 401 of the Tariff Act of 1930 (19 U.S.C. 1401)).
            (7) United states person.--The term ``United States 
        person'' means--
                    (A) any United States citizen or alien lawfully 
                admitted for permanent residence to the United States;
                    (B) any corporation, partnership, or other entity 
                organized under the laws of the United States; and
                    (C) any person in the United States.
            (8) Vessel.--The term ``vessel'' includes every description 
        of water craft or other contrivance used, or capable of being 
        used, as a means of transportation in water, but does not 
        include aircraft.

SEC. 9. EFFECTIVE DATE.

    This Act shall take effect 180 days after the date of the enactment 
of this Act.

SEC. 10. TERMINATION.

    This Act shall cease to be effective 30 days after the date on 
which the President determines and certifies to the Congress that the 
People's Republic of China--
            (1) at the national, provincial, and local levels, is 
        governed by governments that are democratically elected from 
        free and fair elections--
                    (A) conducted under the supervision of 
                internationally recognized observers; and
                    (B) in which--
                            (i) opposition parties were permitted ample 
                        time to organize and campaign for such 
                        elections; and
                            (ii) all candidates were permitted full 
                        access to the media;
            (2) is showing respect for the basic civil liberties and 
        human rights of the citizens of the People's Republic of China;
            (3) has a market-oriented economic system based on the 
        right to own and enjoy property;
            (4) ensures regular free and fair elections and the full 
        enjoyment of basic civil liberties and human rights by the 
        citizens of the People's Republic of China;
            (5) has established an independent judiciary; and
            (6) is no longer engaging in wide-scale espionage 
        activities directed against the United States.