I

103D CONGRESS

1ST SESSION H. R. 1991

To extend to the People’s Republic of China renewal of nondiscriminatory

(most-favored-nation) treatment provided certain conditions are met.

IN THE HOUSE OF REPRESENTATIVES

MAY 5, 1993

Mr. SMITH of New Jersey (for himself, Mr. OBERSTAR, Mr. WOLF, Mr. LAFALCE, Mr. HYDE, and Mr. SOLOMON) introduced the following bill;

which was referred jointly to the Committees on Ways and Means, Foreign Affairs, and Rules

A BILL

To extend to the People’s Republic of China renewal of

nondiscriminatory (most-favored-nation) treatment provided certain conditions are met.

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 1993’’.

6 SEC. 2. FINDINGS AND POLICY.

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

8 findings:
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1 (1) On June 4, 1989, thousands of Chinese citi2 zens courageously demonstrated that they were pre3 pared to risk their lives and futures in pursuit of

4 democratic freedom and respect for human rights.

5 (2) The People’s Republic of China, as a mem6 ber of the United Nations Security Council, is obli7 gated to respect and uphold the United Nations

8 Charter and Universal Declaration of Human

9 Rights.

10 (3) Despite the massive demonstration for self11 determination and fundamental principles of human

12 rights and despite the People’s Republic of China’s

13 membership in the United Nations, the Government

14 of the People’s Republic of China continues to fla15 grantly violate internationally recognized standards

16 of human rights, and engages in—

17 (A) torture and cruel, inhuman, or degrad18 ing treatment or punishment;

19 (B) arbitrary arrest, unacknowledged de20 tention without charges and trial, and jailing of

21 persons solely for the nonviolent expression of

22 their political views; and

23 (C) use of prison labor to produce cheap

24 products for export to countries, including the
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1 United States, in violation of international labor

2 treaties and United States law.

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

4 China continues to deny Chinese citizens and others,

5 who have supported the prodemocracy movement,

6 the right of free emigration despite having pledged

7 to do so in 1991.

8 (5) The Government of the People’s Republic of

9 China continues to employ a repressive ‘‘birth

10 quota’’ system, implemented by the use of forced

11 abortions and involuntary sterilizations.

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

13 China continues to use military and police forces to

14 intimidate and repress the Tibetan people seeking

15 political and religious freedom, and continues to vio16 late the provisions of the Fourth Geneva Convention

17 by encouraging the resettlement of large numbers of

18 Chinese in Tibet.

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

20 China continues to engage in unfair trade practices

21 against the United States by raising tariffs, employ22 ing taxes as a surcharge on tariffs, using discrimina23 tory customs rates, imposing import quotas and

24 other quantitative restrictions, barring the importa25 tion of certain items, using licensing and testing re-
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1 quirements to limit imports, and falsifying country

2 of origin documentation to transship textiles and

3 other items to the United States through Hong

4 Kong and third countries.

5 (8) Although the Government of the People’s

6 Republic of China has pledged to adhere to the

7 guidelines and parameters of the Missile Technology

8 Control Regime, there are continuing reports of Chi9 nese transfers of military technology covered by such

10 Regime to the Middle East, Africa, and Asia.

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

12 China continues to unjustly restrict and imprison re13 ligious leaders and members of religious groups who

14 do not adhere to the dogma and control of state15 sponsored religious organizations.

16 (10) It is the policy and practice of the Govern17 ment of the People’s Republic of China’s Communist

18 Party to control all trade unions and suppress and

19 harass members of the independent labor union

20 movement.

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

22 of China continues to harass and restrict the activi23 ties of accredited journalists and to restrict broad24 casts by the Voice of America.

25 (b) POLICY.—It is the sense of the Congress that—
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1 (1) with respect to the actions of the People’s

2 Republic of China in the areas of human rights,

3 weapons proliferation, and unfair trade practices,

4 the President should take such action as is necessary

5 to achieve the purposes of this Act, including—

6 (A) urging the Communist Chinese leaders

7 to release all political and religious prisoners in

8 China and Tibet, and to cease forcing the large9 scale influx of Chinese settlers into Tibet which

10 is threatening the survival of the Tibetan cul11 ture;

12 (B) conducting diplomatic negotiations

13 with the Government of the People’s Republic

14 of China to encourage them to allow inter15 national human rights and humanitarian orga16 nizations access to prisoners in China and

17 Tibet;

18 (C) directing the United States Trade Rep19 resentative to take necessary and appropriate

20 action pursuant to section 301 of the Trade Act

21 of 1974 and the Memorandum of Understand22 ing between the Governments of the United

23 States and People’s Republic of China concern24 ing market access, signed October 10, 1992,

25 with respect to the continuing unfair trade
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1 practices of the People’s Republic of China that

2 are discriminatory and unreasonably restrict

3 United States commerce; and

4 (D) encouraging members of the Missile

5 Technology Control Regime and other countries

6 to develop a common policy concerning the Peo7 ple’s Republic of China’s transfer of missile

8 technology to other countries;

9 (2) sanctions being applied against the People’s

10 Republic of China on the date of the enactment of

11 this Act should be continued and strictly enforced;

12 and

13 (3) the President should direct the Secretary of

14 Commerce to consult with American business lead15 ers, having significant trade with or investments in

16 the People’s Republic of China, to encourage them

17 to adopt a voluntary code of conduct that—

18 (A) follows internationally recognized

19 human rights principles;

20 (B) ensures that the employment of Chi21 nese citizens is not discriminatory in terms of

22 sex, ethnic origin, or political belief;

23 (C) refrains from knowingly using prison

24 labor;
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1 (D) recognizes workers right to organize

2 and bargain collectively; and

3 (E) discourages mandatory political indoc4 trination on business sites.

5 SEC. 3. MINIMUM STANDARDS WHICH THE GOVERNMENT

6 OF THE PEOPLE’S REPUBLIC OF CHINA MUST

7 MEET TO CONTINUE TO RECEIVE NON8 DISCRIMINATORY MOST-FAVORED-NATION

9 TREATMENT.

10 Notwithstanding any other provisions of law, the

11 President may not recommend continuation of a waiver

12 for the 12-month period beginning July 3, 1994, under

13 section 402(d) of the Trade Act of 1974 (19 U.S.C.

14 2432(d)) for the People’s Republic of China, unless the

15 President reports in the document required to be submit16 ted by such section that the government of that country—

17 (1) has taken appropriate actions to begin ad18 hering to the provisions of the Universal Declaration

19 of Human Rights in China and Tibet;

20 (2) is allowing unrestricted emigration of the

21 citizens who desire to leave China for reasons of po22 litical or religious persecution to join family mem23 bers abroad, or for other valid reasons;

24 (3) has provided an acceptable accounting for

25 and release of Chinese citizens detained, accused, or
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1 sentenced as a result of the nonviolent expression of

2 their political beliefs in relation to events which oc3 curred during and after the violent repression of

4 demonstrations in Tiananmen Square on June 4,

5 1989, and has provided an acceptable accounting for

6 and release of other citizens detained, accused, or

7 sentenced for the nonviolent expression of their po8 litical beliefs or for peacefully exercising their inter9 nationally guaranteed rights of freedom of speech,

10 association, and assembly;

11 (4) does not support or administer any program

12 of coercive abortion or involuntary sterilization;

13 (5) has taken effective, verifiable action to pre14 vent export of products to the United States manu15 factured wholly or in part by convict, forced, or in16 dentured labor and has complied with the terms of

17 the Memorandum of Understanding signed on Au18 gust 7, 1992, by allowing, without limitation or re19 striction, United States Customs officials to visit

20 places suspected of producing such goods for export;

21 and

22 (6) has made overall significant progress in—

23 (A) ceasing religious persecution and lift24 ing restrictions on freedom of religious belief in

25 the People’s Republic of China and Tibet and
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1 ceasing to threaten the survival of the Tibetan

2 culture;

3 (B) releasing leaders and members of reli4 gious groups detained, imprisoned, or under

5 house arrest for expression of their religious be6 liefs;

7 (C) ceasing unfair and discriminatory

8 trade practices which restrict and unreasonably

9 burden American business;

10 (D) providing United States exporters fair

11 access to Chinese markets, including lowering

12 tariffs, removing nontariff barriers, and increas13 ing the purchase of United States goods and

14 services;

15 (E) adhering to the guidelines and param16 eters of the Missile Technology Control Regime

17 and the controls adopted by the Nuclear Suppli18 ers Group and the Australian Group on Chemi19 cal and Biological Arms;

20 (F) adhering to the Joint Declaration on

21 Hong Kong that was entered into between the

22 United Kingdom and the People’s Republic of

23 China;

24 (G) cooperating with United States efforts

25 to obtain an acceptable accounting of United
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1 States military personnel who are listed as pris2 oners of war or missing in action as a result of

3 their service in—

4 (i) the Korean conflict; or

5 (ii) the Vietnam conflict;

6 (H) ceasing the jamming of Voice of Amer7 ica broadcasts; and

8 (I) providing international human rights

9 and humanitarian groups access to prisoners,

10 trials, and places of detention.

11 SEC. 4. REPORT BY THE PRESIDENT.

12 If the President recommends in 1994 that the waiver

13 referred to in section 3 be continued for the People’s Re14 public of China, the President shall state in the document

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

16 of the Trade Act of 1974, the extent to which the Govern17 ment of the People’s Republic of China has complied with

18 the provisions of section 3, during the period covered by

19 the document.

20 SEC. 5. NONDISCRIMINATORY TREATMENT FOR PRODUCTS

21 FROM NONSTATE-OWNED ENTERPRISES.

22 (a) IN GENERAL.—Notwithstanding any other provi23 sions of law, if nondiscriminatory treatment is not granted

24 to the People’s Republic of China by reason of the occur-
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1 rence of an event described in subsection (b), nondiscrim2 inatory treatment shall—

3 (1) continue to apply to any good that is pro4 duced or manufactured by a person that is not a

5 state-owned enterprise of the People’s Republic of

6 China, but

7 (2) not apply to any such good that is marketed

8 or otherwise exported by a state-owned enterprise of

9 the People’s Republic of China.

10 Nondiscriminatory treatment under this section shall be

11 in effect for the same period of time the waiver referred

12 to in section 3 would have been effective had it taken ef13 fect.

14 (b) EVENTS.—An event described in this subsection

15 means—

16 (1) the President fails to request the waiver re17 ferred to in section 3 and reports to the Congress

18 that such failure was a result of the President’s in19 ability to report that the People’s Republic of China

20 has met the standards described in such section; or

21 (2) the President requests the waiver referred

22 to in section 3, but a disapproval resolution de23 scribed in subsection (c)(1) is enacted into law.

24 (c) DISAPPROVAL RESOLUTION.—
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1 (1) IN GENERAL.—For purposes of this section,

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

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

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

5 Congress does not approve the extension of the au6 thority contained in section 402(c) of the Trade Act

7 of 1974 recommended by the President to the Con8 gress on llllllll with respect to the

9 People’s Republic of China because the Congress

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

11 has met the standards described in section 3 of the

12 United States-China Act of 1993’’, with the blank

13 space being filled with the appropriate date.

14 (2) APPLICABLE RULES.—The provisions of

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

16 subsection (b) of such section) and 402(d)(2) (as

17 modified by this subsection) of the Trade Act of

18 1974 shall apply to a resolution described in para19 graph (1).

20 (d) DETERMINATION OF DUTY STATUS OF ENTER21 PRISES.—

22 (1) IN GENERAL.—Subject to paragraph (2),

23 the Secretary of the Treasury shall determine which

24 persons are state-owned enterprises of the People’s
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1 Republic of China for purposes of this Act and com2 pile and maintain a list of such persons.

3 (2) DEFINITIONS AND SPECIAL RULES.—For

4 purposes of making the determination required by

5 paragraph (1), the following definitions apply:

6 (A)(i) The term ‘‘state-owned enterprise of

7 the People’s Republic of China’’ means a person

8 affiliated with or wholly owned, controlled, or

9 subsidized by the Government of the People’s

10 Republic of China and whose means of produc11 tion, products, and revenues are owned or con12 trolled by a central or provincial government

13 authority. A person shall be considered to be

14 state-owned if—

15 (I) the person’s assets are primarily

16 owned by a central or provincial govern17 ment authority;

18 (II) a substantial proportion of the

19 person’s profits are required to be submit20 ted to a central or provincial government

21 authority;

22 (III) the person’s production, pur23 chases of inputs, and sales of output, in

24 whole or in part, are subject to state, sec25 toral, or regional plans; or
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1 (IV) a license issued by a government

2 authority classifies the person as state3 owned.

4 (ii) Any person that—

5 (I) is a qualified foreign joint venture

6 or is licensed by a governmental authority

7 as a collective, cooperative, or private en8 terprise; or

9 (II) is wholly owned by a foreign per10 son,

11 shall not be considered to be state-owned.

12 (B) The term ‘‘qualified foreign joint ven13 ture’’ means any person—

14 (i) which is registered and licensed in

15 the agency or department of the Govern16 ment of the People’s Republic of China

17 concerned with foreign economic relations

18 and trade as an equity, cooperative, con19 tractual joint venture, or joint stock com20 pany with foreign investment;

21 (ii) in which the foreign investor part22 ner and a person of the People’s Republic

23 of China share profits and losses and joint24 ly manage the venture;
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1 (iii) in which the foreign investor

2 partner holds or controls at least 25 per3 cent of the investment and the foreign in4 vestor partner is not substantially owned

5 or controlled by a state-owned enterprise of

6 the People’s Republic of China;

7 (iv) in which the foreign investor part8 ner is not a person of a country the gov9 ernment of which the Secretary of State

10 has determined under section 6(j) of the

11 Export Administration Act of 1979 to have

12 repeatedly provided support for acts of

13 international terrorism; and

14 (v) which does not use state-owned

15 enterprises of the People’s Republic of

16 China to export its good or services.

17 (C) The term ‘‘person’’ means a natural

18 person, corporation, partnership, enterprise, in19 strumentality, agency, or other entity.

20 (D) The term ‘‘foreign investor partner’’

21 means—

22 (i) a natural person who is not a citi23 zen of the People’s Republic of China; and

24 (ii) a corporation, partnership, instru25 mentality, enterprise, agency, or other en-
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1 tity that is organized under the laws of a

2 country other than the People’s Republic

3 of China and 50 percent or more of the

4 outstanding capital stock or beneficial in5 terest of such entity is owned (directly or

6 indirectly) by natural persons who are not

7 citizens of the People’s Republic of China.

8 (e) PETITION FOR CHANGE IN DUTY STATUS.—Any

9 person who believes that a person should be included on

10 or excluded from the list compiled by the Secretary under

11 subsection (d)(1) may request that the Secretary review

12 the status of such person.

13 SEC. 6. EFFECT OF GATT ENTRY ON MFN STATUS.

14 Notwithstanding the entry of the People’s Republic

15 of China into the General Agreement on Tariffs and

16 Trade, most-favored-nation treatment shall not be auto17 matically conferred on the products of the People’s Repub18 lic of China unless the People’s Republic of China satisfies

19 the standards described in section 3 and complies with sec20 tion 402 of the Trade Act of 1974 (19 U.S.C. 2432).

21 SEC. 7. SANCTIONS BY OTHER COUNTRIES.

22 If the President decides not to seek a continuation

23 of a waiver in 1994 under section 402(d) of the Trade

24 Act of 1974 for the People’s Republic of China, the Presi25 dent shall, during the 30-day period beginning on the date
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1 that the President would have recommended to the Con2 gress that such a waiver be continued, undertake efforts

3 to ensure that members of the General Agreement on Tar4 iffs and Trade take similar action with respect to the Peo5 ple’s Republic of China.

6 SEC. 8. DEFINITIONS.

7 For purposes of this Act:

8 (1) DETAINED AND IMPRISONED.—The terms

9 ‘‘detained’’ and ‘‘imprisoned’’ include, but are not

10 limited to, incarceration in prisons, jails, labor re11 form camps, labor reeducation camps, and local po12 lice detention centers.

13 (2) ACCEPTABLE ACCOUNTING.—The term ‘‘ac14 ceptable accounting’’ includes—

15 (A) providing information regarding the lo16 cation of any person being held,

17 (B) the legal status of such person,

18 (C) if convicted, the sentence of such per19 son, and

20 (D) if released, when and with what re21 strictions.

22 (3) CONVICT, FORCED, OR INDENTURED

23 LABOR.—The term ‘‘convict, forced, or indentured

24 labor’’ has the meaning given such term by section

25 307 of the Tariff Act of 1930 (19 U.S.C. 1307).
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1 (4) VIOLATIONS OF INTERNATIONALLY RECOG2 NIZED STANDARDS OF HUMAN RIGHTS.—The term

3 ‘‘violations of internationally recognized standards of

4 human rights’’ includes, but is not limited to, tor5 ture, cruel, inhuman, or degrading treatment or

6 punishment, prolonged detention without charges

7 and trial, causing the disappearance of persons by

8 the abduction and clandestine detention of those per9 sons, secret judicial proceedings, and other flagrant

10 denial of the right to life, liberty, or the security of

11 any person.

12 (5) MISSILE TECHNOLOGY CONTROL REGIME.—

13 The term ‘‘Missile Technology Control Regime’’

14 means the agreement, as amended, between the

15 United States, the United Kingdom, the Federal Re16 public of Germany, France, Italy, Canada, and

17 Japan, announced on April 16, 1987, to restrict sen18 sitive missile-relevant transfers based on an annex of

19 missile equipment and technology.

20 (6) SIGNIFICANT PROGRESS.—(A) The term

21 ‘‘significant progress’’ in section 3, means the imple22 mentation of measures that will meaningfully reduce,

23 or lead to the end of, the practices identified in such

24 section.
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1 (B) With regard to section 3(5)(E), progress

2 may not be determined to be ‘‘significant progress’’

3 if, after the date of the enactment of this Act, the

4 President determines that the People’s Republic of

5 China has transferred—

6 (i) ballistic missiles or missile launchers for

7 the M–9 or M–11 weapons systems to Syria,

8 Pakistan, or Iran; or

9 (ii) material, equipment, or technology that

10 would contribute significantly to the manufac11 ture of a nuclear explosive device to another

12 country and that the material, equipment, or

13 technology is to be used by such country in the

14 manufacture of such device.

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