II

107TH CONGRESS

1ST SESSION S. 1307

To bar access to United States capital markets to enterprises owned or

controlled by the People’s Republic of China, and for other purposes.

IN THE SENATE OF THE UNITED STATES

AUGUST 2, 2001

Mr. HELMS (for himself and Mr. KYL) introduced the following bill; which was

read twice and referred to the Committee on Banking, Housing, and

Urban Affairs

A BILL

To bar access to United States capital markets to enterprises

owned or controlled by the People’s Republic of China,

and for other purposes.

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 ‘‘China Free Enterprise

5 Act of 2001’’.

6 SEC. 2. FINDINGS.

7 Congress find that—

8 (1) an increased number of privatized enter9 prises and start-up private enterprises in the Peo-
2

•S 1307 IS

1 ple’s Republic of China will serve the interests and

2 quality of life of the people of the People’s Republic

3 of China, given the greater economic growth poten4 tial of market-oriented development;

5 (2) a limitation on access to United States cap6 ital markets by Chinese state-owned enterprises will

7 indicate a United States preference for economic

8 transactions with and investment in privatized enter9 prises, rather than state-owned enterprises, and

10 therefore establish an incentive for the Government

11 of the People’s Republic of China to accelerate pri12 vatization efforts;

13 (3) resources given to state-owned enterprises

14 effectively empower the repressive apparatus of an

15 autocratic government in the People’s Republic of

16 China to perpetuate human and labor rights abuses,

17 the subjugation of Tibet, the despoiling of the envi18 ronment, and suppression of religious freedoms;

19 (4) investments made available to state-owned

20 enterprises affiliated with the complex of military

21 and technology industries in the People’s Republic of

22 China would be particularly inimical to United

23 States interests, given China’s military buildup di24 rected against the United States, Chinese military

25 policies in the Taiwan Strait and South China Sea,
3

•S 1307 IS

1 and arms proliferation efforts destabilizing to the

2 democracies of the Asia-Pacific region and the al3 ready volatile Persian Gulf region;

4 (5) state-owned enterprises of the People’s Re5 public of China which have raised funds in the

6 United States capital markets have failed to engage

7 in adequate disclosure to United States investors

8 concerning where these enterprises (as well as their

9 subsidiaries, parent companies, or other affiliates)

10 are doing business in the world, and with whom;

11 (6) the state-owned Petrochina energy enter12 prise in the People’s Republic of China has offered

13 its securities in the United States without disclosing

14 that investors’ funds would be directly or indirectly

15 subsidizing operations in Sudan on the part of its

16 parent company, China National Petroleum Com17 pany, effectively underwriting the systematic reli18 gious persecution and heinous human rights abuses

19 of the Government of Sudan;

20 (7) a second state-owned enterprise of the Peo21 ple’s Republic of China, China Petroleum and Chem22 ical Company or ‘‘Sinopec’’, has offered securities in

23 the United States without disclosing its recent, and

24 possibly ongoing, investment activity in Sudan or its

25 negotiations to conclude contracts in Iran’s energy
4

•S 1307 IS

1 sector, in violation of the Iran-Libya Sanctions Act

2 of 1993;

3 (8) a limitation on access to United States cap4 ital markets by Chinese state-owned enterprises will

5 not have a deleterious effect on United States busi6 nesses, consumers, or workers as trade sanctions

7 may have;

8 (9) a limitation on access to United States cap9 ital markets by Chinese state-owned enterprises will

10 do no appreciable harm to United States investors or

11 the free flow of capital into and out of the United

12 States;

13 (10) a limitation on access to United States

14 capital markets by Chinese state-owned enterprises

15 will do no appreciable harm to the people of the Peo16 ple’s Republic of China, whose welfare and indi17 vidual liberties it should be the United States policy

18 to enhance; and

19 (11) a limitation on access to United States

20 capital markets by Chinese state-owned enterprises

21 does not violate the terms of permanent normal

22 trade relations status granted by the United States

23 to the People’s Republic of China, nor the General

24 Agreement on Tariffs and Trade.
5

•S 1307 IS

1 SEC. 3. BAN ON SECURITIES MARKET ACCESS.

2 Notwithstanding any provision of the securities laws

3 or any other provision of law, no security issued by, or

4 other interest or participation in, a state-owned enterprise

5 may be—

6 (1) listed, or authorized for listing, on the New

7 York Stock Exchange or the American Stock Ex8 change, or listed, or authorized for listing, on the

9 National Market System of the Nasdaq Stock Mar10 ket (or any successor to such entities); or

11 (2) otherwise listed, or authorized for listing, on

12 a national securities exchange (or tier or segment

13 thereof) or by a registered securities association.

14 SEC. 4. DEFINITIONS.

15 As used in this Act—

16 (1) the term ‘‘registered securities association’’

17 means a securities association registered under sec18 tion 15A of the Securities Exchange Act of 1934 (15

19 U.S.C. 78o–3);

20 (2) the terms ‘‘securities laws’’ and ‘‘security’’

21 have the same meanings as in section 3(a) of the Se22 curities Exchange Act of 1934 (15 U.S.C. 78c(a));

23 and

24 (3) the term ‘‘state-owned enterprise’’ means

25 any entity, not less than 50 percent of the assets of

26 which are owned by any agency or instrumentality of
6

•S 1307 IS

1 the Government of the People’s Republic of China

2 (including any agency or instrumentality thereof), ei3 ther directly or through a subsidiary, parent com4 pany, or other affiliate, including those located in

5 Hong Kong or elsewhere.

Æ