I 

108TH CONGRESS 

1ST SESSION H. R. 3364

To authorize appropriate action if the negotiations with the People’s Republic 

of China regarding China’s undervalued currency and currency manipulation are not successful. 

IN THE HOUSE OF REPRESENTATIVES 

OCTOBER 21, 2003

Mrs. MYRICK (for herself and Mr. SPRATT) introduced the following bill; 

which was referred to the Committee on Ways and Means 

A BILL

To authorize appropriate action if the negotiations with the 

People’s Republic of China regarding China’s undervalued currency and currency manipulation are not successful.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. FINDINGS. 

4 Congress makes the following findings: 

5 (1) The currency of the People’s Republic of 

6 China, the yuan, is artificially pegged at a level sig7 nificantly below its market value. Economists esti-
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1 mate the yuan to be undervalued by between 15 per2 cent and 40 percent or an average of 27.5 percent. 

3 (2) The undervaluation of the yuan makes ex4 ports from the People’s Republic of China less ex5 pensive for foreign consumers and makes foreign 

6 products more expensive for Chinese consumers. The 

7 effective result is a significant subsidization of Chi8 na’s exports and a virtual tariff on foreign imports, 

9 leading the People’s Republic of China to enjoy sig10 nificant trade surpluses with its international trad11 ing partners. The United States trade deficit with 

12 China has widened from $57,000,000,000 in 1998 

13 to $103,000,000,000 in 2002, resulting in an aggre14 gate deficit with China of over $396,000,000,000 for 

15 that 5-year period. 

16 (3) China’s undervalued currency and the 

17 United States trade deficit with the People’s Repub18 lic of China is contributing to significant United 

19 States job losses and harming United States busi20 nesses. In particular, the United States manufac21 turing sector has lost over 2,600,000 jobs since 

22 March 2001, which accounts for approximately 90 

23 percent of the total United States job losses. 

24 (4) The Government of the People’s Republic of 

25 China has intervened in the foreign exchange mar-
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1 kets to hold the value of the yuan within an artificial 

2 trading range. China’s foreign reserves are estimated 

3 to be over $345,000,000,000 as of June 2003, and 

4 have increased at a level higher than that of any 

5 other country. 

6 (5) China’s undervalued currency and the Chi7 nese Government’s intervention in the value of its 

8 currency violates the spirit and letter of the world 

9 trading system of which the People’s Republic of 

10 China is now a member. 

11 (6) The Government of the People’s Republic of 

12 China has failed to promptly address concerns raised 

13 by the United States and the international commu14 nity regarding the value of its currency. 

15 (7) Article XXI of the GATT 1994 (as defined 

16 in section 2(1)(B) of the Uruguay Round Agree17 ments Act (19 U.S.C. 3501(1)(B)) allows a member 

18 of the World Trade Organization to take any action 

19 which it considers necessary for the protection of its 

20 essential security interests. Protecting the United 

21 States manufacturing sector is essential to the secu22 rity interests of the United States. 
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1 SEC. 2. NEGOTIATIONS AND CERTIFICATION REGARDING 

2 THE CURRENCY VALUATION POLICY OF THE 

3 PEOPLE’S REPUBLIC OF CHINA. 

4 (a) IN GENERAL.—Notwithstanding the provisions of 

5 title I of Public Law 106–286 (19 U.S.C. 2431 note), on 

6 and after the date that is 180 days after the date of enact7 ment of this Act, unless a certification described in sub8 section (b) has been made to Congress, there shall be im9 posed a rate of duty of 27.5 percent ad valorem on any 

10 article that is the growth, product, or manufacture of the 

11 People’s Republic of China and is imported directly or in12 directly into the United States, in addition to any other 

13 duty that would otherwise apply to such article. 

14 (b) CERTIFICATION.—The certification described in 

15 this subsection means a certification by the President to 

16 Congress that the People’s Republic of China is no longer 

17 manipulating the rate of exchange between its currency 

18 and the United States dollar for purposes of preventing 

19 an effective balance of payments and gaining an unfair 

20 competitive advantage in international trade. The certifi21 cation shall also include a determination that the currency 

22 of the People’s Republic of China is valued in accordance 

23 with accepted market-based trading policies. 

24 (c) NEGOTIATIONS.—Beginning on the date of enact25 ment of this Act, the Secretary of the Treasury, in con26 sultation with the United States Trade Representative, 
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1 shall begin negotiations with the People’s Republic of 

2 China to ensure that the People’s Republic of China 

3 adopts a process that leads to a market-based system of 

4 currency valuation.

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