IV 

110TH CONGRESS 

1ST SESSION H. RES. 552 

Calling on the Government of the People’s Republic of China to remove 

barriers to United States financial services firms doing business in China. 

IN THE HOUSE OF REPRESENTATIVES 

JULY 17, 2007 

Mr. MARSHALL (for himself, Mr. ROSKAM, Mr. FRANK of Massachusetts, and 

Mr. BACHUS) submitted the following resolution; which was referred to 

the Committee on Financial Services 

RESOLUTION 

Calling on the Government of the People’s Republic of China 

to remove barriers to United States financial services 

firms doing business in China. 

Whereas well-functioning financial markets in China capable 

of accurately pricing risk, valuing assets, allocating capital to its most efficient use, providing financial products 

that allow savers to obtain a market rate of return, and 

capable of intermediating efficiently between savers and 

borrowers are essential if China is to move successfully 

to a market-based economy; 

Whereas the lack of diversification and innovation among 

Chinese financial firms, particularly state-owned banks, 

limits the financial assets in which the Chinese people 

can invest and limits their access to savings and investVerDate Aug 31 2005 01:31 Jul 19, 2007 Jkt 059200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6300 E:\BILLS\HR552.IH HR552

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•HRES 552 IH 

ment vehicles that would allow them to save safely and 

adequately for retirement and insure themselves against 

risks to health and incomes; 

Whereas the current lack of well-functioning financial markets in China has the effect of misallocating capital and 

distorting investment in ways that subsidize capital intensive industries in China’s manufacturing sector and distort trade with the United States and other trading partners as a consequence; 

Whereas an increased presence of United States and other 

foreign financial services firms in China would provide 

substantial benefit to China by aiding in the reform and 

development of the banking, insurance, asset management, and securities industries and providing new products to Chinese consumers that would contribute substantially to their financial security; 

Whereas the United States trade deficit with China in 2006 

was $233,000,000,000, and this trade deficit has nearly 

tripled in size since China joined the World Trade Organization in 2001; 

Whereas the United States financial services sector is a leading source of United States exports globally and has the 

potential to be a major exporter to China; 

Whereas the United States maintains open and nondiscriminatory standards for trade in financial services, while 

China continues to protect large segments of its financial 

services markets from foreign trade; 

Whereas China’s World Trade Organization commitments fail 

to achieve an open and nondiscriminatory environment 

for foreign financial services firms seeking to trade with 

China; 


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•HRES 552 IH 

Whereas China is one of the few remaining major emerging 

market countries that maintains limitations on foreign 

ownership of financial services firms; 

Whereas foreign ownership restrictions severely limit United 

States firms’ ability to operate in China across the financial services sector, such that United States and other 

foreign firms are not permitted to own more than a 49 

percent stake in a Chinese asset management firm, a 20 

percent stake in a Chinese bank, a 33 percent stake in 

a Chinese securities firm, a 24.9 percent stake in a Chinese insurance company, and a 50 percent stake in a life 

insurance joint venture; 

Whereas foreign entities are not permitted to invest in Chinese A-share securities markets except through an onerous licensing and quota system for ‘‘qualified foreign institutional investors,’’ and Chinese institutional investors 

are also restricted in investing in foreign securities markets except through a licensing and quota system for 

‘‘qualified domestic institutional investors’’; 

Whereas the government of China has failed to meet its 

World Trade Organization commitment on licensing of 

foreign broker-dealers and maintains discriminatory restrictions on the scope of business of foreign securities 

firms; 

Whereas the government of China maintains discriminatory 

standards for foreign banks in terms of capital requirements, restrictions on corporate operational form, and restrictions on bank branches, and has been slow to act on 

foreign banks’ applications; 

Whereas the government of China has approved no new enterprise annuities licenses for United States or other forVerDate Aug 31 2005 01:31 Jul 19, 2007 Jkt 059200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6300 E:\BILLS\HR552.IH HR552

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•HRES 552 IH 

eign firms since 2005 and maintains a cumbersome 

multi-agency process for approval of licenses; 

Whereas the government of China maintains discriminatory 

practices for branch applications from foreign-invested 

life insurers, granting branch approvals slowly and consecutively, while domestic insurers receive concurrent approvals to open multiple branches; 

Whereas major Chinese financial institutions have sought licenses to operate in the United States on the grounds 

that Chinese financial regulators satisfy consolidated supervision standards, at the same time the Chinese government restricts access to United States and other foreign firms on grounds that suggest that Chinese regulators may not satisfy these standards; and 

Whereas the Secretary of the Treasury has initiated the Strategic Economic Dialogue as a forum in which to engage 

Chinese officials on economic reform issues, including financial market issues: Now, therefore, be it 

1 Resolved, That it is the sense of the House of Rep2 resentatives that— 

3 (1) the Government of the People’s Republic of 

4 China should immediately implement all of its World 

5 Trade Organization commitments to date in finan6 cial services; 

7 (2) the Government of the People’s Republic of 

8 China should immediately implement all of its com9 mitments to date made under the auspices of the 

10 Strategic Economic Dialogue initiated by the Sec11 retary of the Treasury; 


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•HRES 552 IH 

1 (3) the goals of the United States for the next 

2 meeting of the Strategic Economic Dialogue should 

3 be to achieve Chinese commitments toward— 

4 (A) removal of all foreign investment own5 ership caps on banking, life insurance, asset 

6 management, and securities; 

7 (B) nondiscriminatory treatment of United 

8 States financial services firms (including bank9 ing, insurer, insurance intermediary, asset man10 agement, and securities firms) with regard to li11 censing, corporate form, and permitted prod12 ucts and services; and 

13 (C) nondiscriminatory treatment of United 

14 States financial services firms with regard to 

15 regulation and supervision; and 

16 (4) United States financial service regulators, 

17 in assessing whether applications from Chinese fi18 nancial institutions meet comprehensive consolidated 

19 supervision standards, should consider whether the 

20 applications are for operations and activities in the 

21 United States that are currently prohibited for 

22 United States financial institutions in China, and 

23 the extent to which such prohibitions reflect prob24 lems with the quality of home country supervision. 

Æ 


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