I

103D CONGRESS

2D SESSION H. R. 4590

To provide conditions for renewing nondiscriminatory (most-favored-nation)

treatment for the People’s Republic of China.

IN THE HOUSE OF REPRESENTATIVES

JUNE 16, 1994

Ms. PELOSI (for herself, Mr. GEPHARDT, Mr. BONIOR, Mr. MOAKLEY, Mr.

RANGEL, Mr. STARK, Mr. ROSE, Mr. GILMAN, Mr. WOLF, Mr. SOLOMON,

Mr. GEJDENSON, Mr. EDWARDS of California, Mr. LANTOS, Mr. SYNAR,

Mr. HOYER, Mr. LEWIS of Georgia, Mr. ABERCROMBIE, Mr. ANDREWS

of Maine, Mr. BARTON of Texas, Mr. BERMAN, Mr. CARDIN, Ms. ESHOO,

Mr. FRANK of Massachusetts, Mr. HAMBURG, Ms. KAPTUR, Mrs. LOWEY,

Mr. MARKEY, Ms. MCKINNEY, Mr. MFUME, Mr. MILLER of California,

Mrs. MINK, Mr. OLVER, Mr. ROHRABACHER, Mr. SMITH of New Jersey,

Mrs. UNSOELD, Ms. WOOLSEY, Mr. KENNEDY, Mr. HEFNER, and Mr.

OBEY) introduced the following bill; which was referred jointly to the

Committees on Ways and Means and Rules

A BILL

To provide conditions for renewing nondiscriminatory (mostfavored-nation) treatment for the People’s Republic of China.

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

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘United States-China

5 Act of 1994’’.
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1 SEC. 2. FINDINGS AND POLICY.

2 (a) FINDINGS.—The Congress makes the following

3 findings:

4 (1) In Executive Order 12850, dated May 28,

5 1993, the President established conditions for re6 newing most-favored-nation treatment for the Peo7 ple’s Republic of China in 1994.

8 (2) The Executive order requires that in rec9 ommending the extension of most-favored-nation

10 trade status to the People’s Republic of China for

11 the 12-month period beginning July 3, 1994, the

12 Secretary of State shall not recommend extension

13 unless the Secretary determines that such extension

14 substantially promotes the freedom of emigration ob15 jectives contained in section 402 of the Trade Act of

16 1974 (19 U.S.C. 2432) and that China is complying

17 with the 1992 bilateral agreement between the

18 United States and China concerning export to the

19 United States of products made with prison labor.

20 (3) The Executive order further requires that in

21 making the recommendation, the Secretary of State

22 shall determine if China has made overall significant

23 progress with respect to—

24 (A) taking steps to begin adhering to the

25 Universal Declaration of Human Rights;
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1 (B) releasing and providing an acceptable

2 accounting for Chinese citizens imprisoned or

3 detained for the nonviolent expression of their

4 political and religious beliefs, including such ex5 pressions of beliefs in connection with the De6 mocracy Wall and Tiananmen Square move7 ments;

8 (C) ensuring humane treatment of pris9 oners, and allowing access to prisons by inter10 national humanitarian and human rights orga11 nizations;

12 (D) protecting Tibet’s distinctive religious

13 and cultural heritage; and

14 (E) permitting international radio and tele15 vision broadcasts into China.

16 (4) The Executive order requires the executive

17 branch to resolutely pursue all legislative and execu18 tive actions to ensure that China abides by its com19 mitments to follow fair, nondiscriminatory trade

20 practices in dealing with United States businesses

21 and adheres to the Nuclear Nonproliferation Treaty,

22 the Missile Technology Control Regime guidelines

23 and parameters, and other nonproliferation commit24 ments.
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1 (5) The Government of the People’s Republic of

2 China, a member of the United Nations Security

3 Council obligated to respect and uphold the United

4 Nations charter and Universal Declaration of

5 Human Rights, has over the past year made less

6 than significant progress on human rights. The Peo7 ple’s Republic of China has released only a few

8 prominent political prisoners and continues to violate

9 internationally recognized standards of human rights

10 by arbitrary arrests and detention of persons for the

11 nonviolent expression of their political and religious

12 beliefs.

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

14 China has not allowed humanitarian and human

15 rights organizations access to prisons.

16 (7) The Government of the People’s Republic of

17 China has refused to meet with the Dalai Lama, or

18 his representative, to discuss the protection of Ti19 bet’s distinctive religious and cultural heritage.

20 (8) It continues to be the policy and practice of

21 the Government of the People’s Republic of China to

22 control all trade unions and suppress and harass

23 members of the independent labor union movement.
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1 (9) The Government of the People’s Republic of

2 China continues to restrict the activities of accred3 ited journalists.

4 (10) The People’s Republic of China’s defense

5 industrial trading companies and the People’s Lib6 eration Army engage in lucrative trade relations

7 with the United States and operate lucrative com8 mercial businesses within the United States. Trade

9 with and investments in the defense industrial trad10 ing companies and the People’s Liberation Army are

11 contrary to the national security interests of the

12 United States.

13 (11) The President has conducted an intensive

14 high-level dialogue with the Government of the Peo15 ple’s Republic of China, including meeting with the

16 President of China, in an effort to encourage that

17 government to make significant progress toward

18 meeting the standards contained in the Executive

19 order for continuation of most-favored-nation treat20 ment.

21 (12) The Government of the People’s Republic

22 of China has not made overall significant progress

23 with respect to the standards contained in the Presi24 dent’s Executive Order 12850, dated May 28, 1993.
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1 (b) POLICY.—It is the policy of the Congress that,

2 since the President has recommended the continuation of

3 the waiver under section 402(d) of the Trade Act of 1974

4 for the People’s Republic of China for the 12-month period

5 beginning July 3, 1994, such waiver shall not provide for

6 extension of nondiscriminatory trade treatment to goods

7 that are produced, manufactured, or exported by the Peo8 ple’s Liberation Army or Chinese defense industrial trad9 ing companies or to nonqualified goods that are produced,

10 manufactured, or exported by state-owned enterprises of

11 the People’s Republic of China.

12 SEC. 3. LIMITATIONS ON EXTENSION OF NONDISCRIM13 INATORY TREATMENT.

14 (a) IN GENERAL.—Notwithstanding any other provi15 sion of law—

16 (1) if nondiscriminatory treatment is not grant17 ed to the People’s Republic of China by reason of

18 the enactment into law of a disapproval resolution

19 described in subsection (b)(1), nondiscriminatory

20 treatment shall—

21 (A) continue to apply to any good that is

22 produced or manufactured by a person that is

23 not a state-owned enterprise of the People’s Re24 public of China, but
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1 (B) not apply to any good that is pro2 duced, manufactured, or exported by a state3 owned enterprise of the People’s Republic of

4 China,

5 (2) if nondiscriminatory treatment is granted to

6 the People’s Republic of China for the 12-month pe7 riod beginning on July 3, 1994, such nondiscrim8 inatory treatment shall not apply to—

9 (A) any good that is produced, manufac10 tured, or exported by the People’s Liberation

11 Army or a Chinese defense industrial trading

12 company, or

13 (B) any nonqualified good that is pro14 duced, manufactured, or exported by a state15 owned enterprise of the People’s Republic of

16 China, and

17 (3) in order for nondiscriminatory treatment to

18 be granted to the People’s Republic of China, and

19 subsequent to the granting of such nondiscrim20 inatory treatment, the Secretary of the Treasury

21 shall consult with leaders of American businesses

22 having significant trade with or investment in the

23 People’s Republic of China, to encourage them to

24 adopt a voluntary code of conduct that—
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1 (A) follows internationally recognized

2 human rights principles,

3 (B) ensures that the employment of Chi4 nese citizens is not discriminatory in terms of

5 sex, ethnic origin, or political belief,

6 (C) ensures that no convict, forced, or in7 dentured labor is knowingly used,

8 (D) recognizes the rights of workers to

9 freely organize and bargain collectively, and

10 (E) discourages mandatory political indoc11 trination on business premises.

12 (b) DISAPPROVAL RESOLUTION.—

13 (1) IN GENERAL.—For purposes of this section,

14 the term ‘‘resolution’’ means only a joint resolution

15 of the two Houses of Congress, the matter after the

16 resolving clause of which is as follows: ‘‘That the

17 Congress does not approve the extension of the au18 thority contained in section 402(c) of the Trade Act

19 of 1974 recommended by the President to the Con20 gress on lllllllllll with respect to

21 the People’s Republic of China because the Congress

22 does not agree that the People’s Republic of China

23 has met the standards described in the President’s

24 Executive Order 12850, dated May 28, 1993.’’, with
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1 the blank space being filled with the appropriate

2 date.

3 (2) APPLICABLE RULES.—The provisions of

4 sections 153 (other than paragraphs (3) and (4) of

5 subsection (b)) and 402(d)(2) (as modified by this

6 subsection) of the Trade Act of 1974 shall apply to

7 a resolution described in paragraph (1).

8 (c) DETERMINATION OF STATE-OWNED ENTER9 PRISES AND CHINESE DEFENSE INDUSTRIAL TRADING

10 COMPANIES.—

11 (1) IN GENERAL.—Subject to paragraphs (2)

12 and (3), not later than 90 days after the date of the

13 enactment of this Act, the Secretary of the Treasury

14 shall determine which persons are state-owned enter15 prises of the People’s Republic of China and which

16 persons are Chinese defense industrial trading com17 panies for purposes of this Act. The Secretary shall

18 publish a list of such persons in the Federal Reg19 ister.

20 (2) PUBLIC HEARING.—

21 (A) GENERAL RULE.—Before making the

22 determination and publishing the list required

23 by paragraph (1), the Secretary of the Treasury

24 shall hold a public hearing for the purpose of
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1 receiving oral and written testimony regarding

2 the persons to be included on the list.

3 (B) ADDITIONS AND DELETIONS.—The

4 Secretary of the Treasury may add or delete

5 persons from the list based on information

6 available to the Secretary or upon receipt of a

7 request containing sufficient information to

8 take such action.

9 (3) DEFINITIONS AND SPECIAL RULES.—For

10 purposes of making the determination required by

11 paragraph (1), the following definitions apply:

12 (A) CHINESE DEFENSE INDUSTRIAL TRAD13 ING COMPANY.—The term ‘‘Chinese defense in14 dustrial trading company’’—

15 (i) means a person that is—

16 (I) engaged in manufacturing,

17 producing, or exporting, and

18 (II) affiliated with or owned, con19 trolled, or subsidized by the People’s

20 Liberation Army, and

21 (ii) includes any person identified in

22 the United States Defense Intelligence

23 Agency publication numbered VP–1920–

24 271–90, dated September 1990.
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1 (B) PEOPLE’S LIBERATION ARMY.—The

2 term ‘‘People’s Liberation Army’’ means any

3 branch or division of the land, naval, or air

4 military service or the police of the Government

5 of the People’s Republic of China.

6 (C) STATE-OWNED ENTERPRISE OF THE

7 PEOPLE’S REPUBLIC OF CHINA.—(i) The term

8 ‘‘state-owned enterprise of the People’s Repub9 lic of China’’ means a person who is affiliated

10 with or wholly owned, controlled, or subsidized

11 by the Government of the People’s Republic of

12 China and whose means of production, prod13 ucts, and revenues are owned or controlled by

14 a central or provincial government authority. A

15 person shall be considered to be state-owned

16 if—

17 (I) the person’s assets are primarily

18 owned by a central or provincial govern19 ment authority;

20 (II) a substantial proportion of the

21 person’s profits are required to be submit22 ted to a central or provincial government

23 authority;

24 (III) the person’s production, pur25 chases of inputs, and sales of output, in
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1 whole or in part, are subject to state, sec2 toral, or regional plans; or

3 (IV) a license issued by a government

4 authority classifies the person as state5 owned.

6 (ii) Any person that—

7 (I) is a qualified foreign joint venture

8 or is licensed by a governmental authority

9 as a collective, cooperative, or private en10 terprise; or

11 (II) is wholly owned by a foreign per12 son,

13 shall not be considered to be state-owned.

14 (D) QUALIFIED FOREIGN JOINT VEN15 TURE.—The term ‘‘qualified foreign joint ven16 ture’’ means any person—

17 (i) which is registered and licensed in

18 the agency or department of the Govern19 ment of the People’s Republic of China

20 concerned with foreign economic relations

21 and trade as an equity, cooperative, con22 tractual joint venture, or joint stock com23 pany with foreign investment;

24 (ii) in which the foreign investor part25 ner and a person of the People’s Republic
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1 of China share profits and losses and joint2 ly manage the venture;

3 (iii) in which the foreign investor

4 partner holds or controls at least 25 per5 cent of the investment and the foreign in6 vestor partner is not substantially owned

7 or controlled by a state-owned enterprise of

8 the People’s Republic of China;

9 (iv) in which the foreign investor part10 ner is not a person of a country the gov11 ernment of which the Secretary of State

12 has determined under section 6(j) of the

13 Export Administration Act of 1979 (50

14 U.S.C. App. 2405(j)) to have repeatedly

15 provided support for acts of international

16 terrorism; and

17 (v) which does not use state-owned

18 enterprises of the People’s Republic of

19 China to export its goods or services.

20 (E) PERSON.—The term ‘‘person’’ means

21 a natural person, corporation, partnership, en22 terprise, instrumentality, agency, or other en23 tity.

24 (F) FOREIGN INVESTOR PARTNER.—The

25 term ‘‘foreign investor partner’’ means—
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1 (i) a natural person who is not a citi2 zen of the People’s Republic of China; and

3 (ii) a corporation, partnership, instru4 mentality, enterprise, agency, or other en5 tity that is organized under the laws of a

6 country other than the People’s Republic

7 of China and 50 percent or more of the

8 outstanding capital stock or beneficial in9 terest of such entity is owned (directly or

10 indirectly) by natural persons who are not

11 citizens of the People’s Republic of China.

12 (G) NONQUALIFIED GOOD.—The term

13 ‘‘nonqualified good’’ means a good to which

14 chapter 39, 44, 48, 61, 62, 64, 70, 73, 84, 93,

15 or 94 of the Harmonized Tariff Schedule of the

16 United States applies.

17 (H) CONVICT, FORCED, OR INDENTURED

18 LABOR.—The term ‘‘convict, forced, or inden19 tured labor’’ has the meaning given such term

20 by section 307 of the Tariff Act of 1930 (19

21 U.S.C. 1307).

22 (I) VIOLATIONS OF INTERNATIONALLY

23 RECOGNIZED STANDARDS OF HUMAN RIGHTS.—

24 The term ‘‘violations of internationally recog25 nized standards of human rights’’ includes but
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1 is not limited to, torture, cruel, inhuman, or de2 grading treatment or punishment, prolonged de3 tention without charges and trial, causing the

4 disappearance of persons by abduction and

5 clandestine detention of those persons, secret

6 judicial proceedings, and other flagrant denial

7 of the right to life, liberty, or the security of

8 any person.

9 (J) MISSILE TECHNOLOGY CONTROL RE10 GIME.—The term ‘‘Missile Technology Control

11 Regime’’ means the agreement, as amended, be12 tween the United States, the United Kingdom,

13 the Federal Republic of Germany, France,

14 Italy, Canada, and Japan, announced on April

15 16, 1987, to restrict sensitive missile-relevant

16 transfers based on an annex of missile equip17 ment and technology.

18 (d) SEMIANNUAL REPORTS.—The Secretary of the

19 Treasury shall, not later than 6 months after the date of

20 the enactment of this Act, and the end of each 6-month

21 period occurring thereafter, report to the Congress on the

22 efforts of the executive branch to carry out subsection (c).

23 The Secretary may include in the report a request for ad24 ditional authority, if necessary, to carry out subsection (c).

25 In addition, the report shall include information regarding
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1 the efforts of the executive branch to carry out subsection

2 (a)(3).

3 SEC. 4. PRESIDENTIAL WAIVER.

4 The President may waive the application of any con5 dition or prohibition imposed on any person pursuant to

6 this Act, if the President determines and reports to the

7 Congress that the continued imposition of the condition

8 or prohibition would have a serious adverse effect on the

9 vital national security interests of the United States.

10 SEC. 5. REPORT BY THE PRESIDENT.

11 If the President recommends in 1995 that the waiver

12 referred to in section 2 be continued for the People’s Re13 public of China, the President shall state in the document

14 required to be submitted to the Congress by section 402(d)

15 of the Trade Act of 1974, the extent to which the Govern16 ment of the People’s Republic of China has made progress

17 during the period covered by the document, with respect

18 to—

19 (1) adhering to the provisions of the Universal

20 Declaration of Human Rights,

21 (2) ceasing the exportation to the United States

22 of products made with convict, force, or indentured

23 labor,
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1 (3) ceasing unfair and discriminatory trade

2 practices which restrict and unreasonably burden

3 American business, and

4 (4) adhering to the guidelines and parameters

5 of the Missile Technology Control Regime, the con6 trols adopted by the Nuclear Suppliers Group, and

7 the controls adopted by the Australia Group.

8 SEC. 6. SANCTIONS BY OTHER COUNTRIES.

9 If the President decides not to seek a continuation

10 of a waiver in 1995 for the People’s Republic of China

11 under section 402(d) of the Trade Act of 1974, the Presi12 dent shall, during the 30-day period beginning on the date

13 that the President would have recommended to the Con14 gress that such a waiver be continued, undertake efforts

15 to ensure that members of the General Agreement on Tar16 iffs and Trade take a similar action with respect to the

17 People’s Republic of China.

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