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 (most-
favored-nation) treatment for the People’s Republic of China.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘United States-China
Act of 1994’’.
SEC. 2. FINDINGS AND POLICY.
(a) FINDINGS.—The Congress makes the following
findings:
(1) In Executive Order 12850, dated May 28,
1993, the President established conditions for re-
newing most-favored-nation treatment for the Peo-
ple’s Republic of China in 1994.
(2) The Executive order requires that in rec-
ommending the extension of most-favored-nation
trade status to the People’s Republic of China for
the 12-month period beginning July 3, 1994, the
Secretary of State shall not recommend extension
unless the Secretary determines that such extension
substantially promotes the freedom of emigration ob-
jectives contained in section 402 of the Trade Act of
1974 (19 U.S.C. 2432) and that China is complying
with the 1992 bilateral agreement between the
United States and China concerning export to the
United States of products made with prison labor.
(3) The Executive order further requires that in
making the recommendation, the Secretary of State
shall determine if China has made overall significant
progress with respect to—
(A) taking steps to begin adhering to the
Universal Declaration of Human Rights;
(B) releasing and providing an acceptable
accounting for Chinese citizens imprisoned or
detained for the nonviolent expression of their
political and religious beliefs, including such ex-
pressions of beliefs in connection with the De-
mocracy Wall and Tiananmen Square move-
ments;
(C) ensuring humane treatment of pris-
oners, and allowing access to prisons by inter-
national humanitarian and human rights orga-
nizations;
(D) protecting Tibet’s distinctive religious
and cultural heritage; and
(E) permitting international radio and tele-
vision broadcasts into China.
(4) The Executive order requires the executive
branch to resolutely pursue all legislative and execu-
tive actions to ensure that China abides by its com-
mitments to follow fair, nondiscriminatory trade
practices in dealing with United States businesses
and adheres to the Nuclear Nonproliferation Treaty,
the Missile Technology Control Regime guidelines
and parameters, and other nonproliferation commit-
ments.
(5) The Government of the People’s Republic of
China, a member of the United Nations Security
Council obligated to respect and uphold the United
Nations charter and Universal Declaration of
Human Rights, has over the past year made less
than significant progress on human rights. The Peo-
ple’s Republic of China has released only a few
prominent political prisoners and continues to violate
internationally recognized standards of human rights
by arbitrary arrests and detention of persons for the
nonviolent expression of their political and religious
beliefs.
(6) The Government of the People’s Republic of
China has not allowed humanitarian and human
rights organizations access to prisons.
(7) The Government of the People’s Republic of
China has refused to meet with the Dalai Lama, or
his representative, to discuss the protection of Ti-
bet’s distinctive religious and cultural heritage.
(8) It continues to be the policy and practice of
the Government of the People’s Republic of China to
control all trade unions and suppress and harass
members of the independent labor union movement.
(9) The Government of the People’s Republic of
China continues to restrict the activities of accred-
ited journalists.
(10) The People’s Republic of China’s defense
industrial trading companies and the People’s Lib-
eration Army engage in lucrative trade relations
with the United States and operate lucrative com-
mercial businesses within the United States. Trade
with and investments in the defense industrial trad-
ing companies and the People’s Liberation Army are
contrary to the national security interests of the
United States.
(11) The President has conducted an intensive
high-level dialogue with the Government of the Peo-
ple’s Republic of China, including meeting with the
President of China, in an effort to encourage that
government to make significant progress toward
meeting the standards contained in the Executive
order for continuation of most-favored-nation treat-
ment.
(12) The Government of the People’s Republic
of China has not made overall significant progress
with respect to the standards contained in the Presi-
dent’s Executive Order 12850, dated May 28, 1993.
(b) POLICY.—It is the policy of the Congress that,
since the President has recommended the continuation of
the waiver under section 402(d) of the Trade Act of 1974
for the People’s Republic of China for the 12-month period
beginning July 3, 1994, such waiver shall not provide for
extension of nondiscriminatory trade treatment to goods
that are produced, manufactured, or exported by the Peo-
ple’s Liberation Army or Chinese defense industrial trad-
ing companies or to nonqualified goods that are produced,
manufactured, or exported by state-owned enterprises of
the People’s Republic of China.
SEC. 3. LIMITATIONS ON EXTENSION OF NONDISCRIM-
INATORY TREATMENT.
(a) IN GENERAL.—Notwithstanding any other provi-
sion of law—
(1) if nondiscriminatory treatment is not grant-
ed to the People’s Republic of China by reason of
the enactment into law of a disapproval resolution
described in subsection (b)(1), nondiscriminatory
treatment shall—
(A) continue to apply to any good that is
produced or manufactured by a person that is
not a state-owned enterprise of the People’s Re-
public of China, but
(B) not apply to any good that is pro-
duced, manufactured, or exported by a state-
owned enterprise of the People’s Republic of
China,
(2) if nondiscriminatory treatment is granted to
the People’s Republic of China for the 12-month pe-
riod beginning on July 3, 1994, such nondiscrim-
inatory treatment shall not apply to—
(A) any good that is produced, manufac-
tured, or exported by the People’s Liberation
Army or a Chinese defense industrial trading
company, or
(B) any nonqualified good that is pro-
duced, manufactured, or exported by a state-
owned enterprise of the People’s Republic of
China, and
(3) in order for nondiscriminatory treatment to
be granted to the People’s Republic of China, and
subsequent to the granting of such nondiscrim-
inatory treatment, the Secretary of the Treasury
shall consult with leaders of American businesses
having significant trade with or investment in the
People’s Republic of China, to encourage them to
adopt a voluntary code of conduct that—
(A) 
follows 
internationally 
recognized
human rights principles,
(B) ensures that the employment of Chi-
nese citizens is not discriminatory in terms of
sex, ethnic origin, or political belief,
(C) ensures that no convict, forced, or in-
dentured labor is knowingly used,
(D) recognizes the rights of workers to
freely organize and bargain collectively, and
(E) discourages mandatory political indoc-
trination on business premises.
(b) DISAPPROVAL RESOLUTION.—
(1) IN GENERAL.—For purposes of this section,
the term ‘‘resolution’’ means only a joint resolution
of the two Houses of Congress, the matter after the
resolving clause of which is as follows: ‘‘That the
Congress does not approve the extension of the au-
thority contained in section 402(c) of the Trade Act
of 1974 recommended by the President to the Con-
gress on lllllllllll with respect to
the People’s Republic of China because the Congress
does not agree that the People’s Republic of China
has met the standards described in the President’s
Executive Order 12850, dated May 28, 1993.’’, with
the blank space being filled with the appropriate
date.
(2) APPLICABLE
RULES.—The provisions of
sections 153 (other than paragraphs (3) and (4) of
subsection (b)) and 402(d)(2) (as modified by this
subsection) of the Trade Act of 1974 shall apply to
a resolution described in paragraph (1).
(c) DETERMINATION
OF
STATE-OWNED
ENTER-
PRISES AND CHINESE DEFENSE INDUSTRIAL TRADING
COMPANIES.—
(1) IN GENERAL.—Subject to paragraphs (2)
and (3), not later than 90 days after the date of the
enactment of this Act, the Secretary of the Treasury
shall determine which persons are state-owned enter-
prises of the People’s Republic of China and which
persons are Chinese defense industrial trading com-
panies for purposes of this Act. The Secretary shall
publish a list of such persons in the Federal Reg-
ister.
(2) PUBLIC HEARING.—
(A) GENERAL RULE.—Before making the
determination and publishing the list required
by paragraph (1), the Secretary of the Treasury
shall hold a public hearing for the purpose of
receiving oral and written testimony regarding
the persons to be included on the list.
(B) ADDITIONS
AND
DELETIONS.—The
Secretary of the Treasury may add or delete
persons from the list based on information
available to the Secretary or upon receipt of a
request containing sufficient information to
take such action.
(3) DEFINITIONS
AND
SPECIAL
RULES.—For
purposes of making the determination required by
paragraph (1), the following definitions apply:
(A) CHINESE DEFENSE INDUSTRIAL TRAD-
ING COMPANY.—The term ‘‘Chinese defense in-
dustrial trading company’’—
(i) means a person that is—
(I) engaged in manufacturing,
producing, or exporting, and
(II) affiliated with or owned, con-
trolled, or subsidized by the People’s
Liberation Army, and
(ii) includes any person identified in
the United States Defense Intelligence
Agency publication numbered VP–1920–
271–90, dated September 1990.
(B) PEOPLE’S
LIBERATION
ARMY.—The
term ‘‘People’s Liberation Army’’ means any
branch or division of the land, naval, or air
military service or the police of the Government
of the People’s Republic of China.
(C) STATE-OWNED
ENTERPRISE
OF
THE
PEOPLE’S REPUBLIC OF CHINA.—(i) The term
‘‘state-owned enterprise of the People’s Repub-
lic of China’’ means a person who is affiliated
with or wholly owned, controlled, or subsidized
by the Government of the People’s Republic of
China and whose means of production, prod-
ucts, and revenues are owned or controlled by
a central or provincial government authority. A
person shall be considered to be state-owned
if—
(I) the person’s assets are primarily
owned by a central or provincial govern-
ment authority;
(II) a substantial proportion of the
person’s profits are required to be submit-
ted to a central or provincial government
authority;
(III) the person’s production, pur-
chases of inputs, and sales of output, in
whole or in part, are subject to state, sec-
toral, or regional plans; or
(IV) a license issued by a government
authority classifies the person as state-
owned.
(ii) Any person that—
(I) is a qualified foreign joint venture
or is licensed by a governmental authority
as a collective, cooperative, or private en-
terprise; or
(II) is wholly owned by a foreign per-
son,
shall not be considered to be state-owned.
(D) QUALIFIED
FOREIGN
JOINT
VEN-
TURE.—The term ‘‘qualified foreign joint ven-
ture’’ means any person—
(i) which is registered and licensed in
the agency or department of the Govern-
ment of the People’s Republic of China
concerned with foreign economic relations
and trade as an equity, cooperative, con-
tractual joint venture, or joint stock com-
pany with foreign investment;
(ii) in which the foreign investor part-
ner and a person of the People’s Republic
of China share profits and losses and joint-
ly manage the venture;
(iii) in which the foreign investor
partner holds or controls at least 25 per-
cent of the investment and the foreign in-
vestor partner is not substantially owned
or controlled by a state-owned enterprise of
the People’s Republic of China;
(iv) in which the foreign investor part-
ner is not a person of a country the gov-
ernment of which the Secretary of State
has determined under section 6(j) of the
Export Administration Act of 1979 (50
U.S.C. App. 2405(j)) to have repeatedly
provided support for acts of international
terrorism; and
(v) which does not use state-owned
enterprises of the People’s Republic of
China to export its goods or services.
(E) PERSON.—The term ‘‘person’’ means
a natural person, corporation, partnership, en-
terprise, instrumentality, agency, or other en-
tity.
(F) FOREIGN
INVESTOR
PARTNER.—The
term ‘‘foreign investor partner’’ means—
(i) a natural person who is not a citi-
zen of the People’s Republic of China; and
(ii) a corporation, partnership, instru-
mentality, enterprise, agency, or other en-
tity that is organized under the laws of a
country other than the People’s Republic
of China and 50 percent or more of the
outstanding capital stock or beneficial in-
terest of such entity is owned (directly or
indirectly) by natural persons who are not
citizens of the People’s Republic of China.
(G) NONQUALIFIED
GOOD.—The term
‘‘nonqualified good’’ means a good to which
chapter 39, 44, 48, 61, 62, 64, 70, 73, 84, 93,
or 94 of the Harmonized Tariff Schedule of the
United States applies.
(H) CONVICT, FORCED, OR INDENTURED
LABOR.—The term ‘‘convict, forced, or inden-
tured labor’’ has the meaning given such term
by section 307 of the Tariff Act of 1930 (19
U.S.C. 1307).
(I) VIOLATIONS
OF
INTERNATIONALLY
RECOGNIZED STANDARDS OF HUMAN RIGHTS.—
The term ‘‘violations of internationally recog-
nized standards of human rights’’ includes but
is not limited to, torture, cruel, inhuman, or de-
grading treatment or punishment, prolonged de-
tention without charges and trial, causing the
disappearance of persons by abduction and
clandestine detention of those persons, secret
judicial proceedings, and other flagrant denial
of the right to life, liberty, or the security of
any person.
(J) MISSILE TECHNOLOGY CONTROL RE-
GIME.—The term ‘‘Missile Technology Control
Regime’’ means the agreement, as amended, be-
tween the United States, the United Kingdom,
the Federal Republic of Germany, France,
Italy, Canada, and Japan, announced on April
16, 1987, to restrict sensitive missile-relevant
transfers based on an annex of missile equip-
ment and technology.
(d) SEMIANNUAL REPORTS.—The Secretary of the
Treasury shall, not later than 6 months after the date of
the enactment of this Act, and the end of each 6-month
period occurring thereafter, report to the Congress on the
efforts of the executive branch to carry out subsection (c).
The Secretary may include in the report a request for ad-
ditional authority, if necessary, to carry out subsection (c).
In addition, the report shall include information regarding
the efforts of the executive branch to carry out subsection
(a)(3).
SEC. 4. PRESIDENTIAL WAIVER.
The President may waive the application of any con-
dition or prohibition imposed on any person pursuant to
this Act, if the President determines and reports to the
Congress that the continued imposition of the condition
or prohibition would have a serious adverse effect on the
vital national security interests of the United States.
SEC. 5. REPORT BY THE PRESIDENT.
If the President recommends in 1995 that the waiver
referred to in section 2 be continued for the People’s Re-
public of China, the President shall state in the document
required to be submitted to the Congress by section 402(d)
of the Trade Act of 1974, the extent to which the Govern-
ment of the People’s Republic of China has made progress
during the period covered by the document, with respect
to—
(1) adhering to the provisions of the Universal
Declaration of Human Rights,
(2) ceasing the exportation to the United States
of products made with convict, force, or indentured
labor,
(3) ceasing unfair and discriminatory trade
practices which restrict and unreasonably burden
American business, and
(4) adhering to the guidelines and parameters
of the Missile Technology Control Regime, the con-
trols adopted by the Nuclear Suppliers Group, and
the controls adopted by the Australia Group.
SEC. 6. SANCTIONS BY OTHER COUNTRIES.
If the President decides not to seek a continuation
of a waiver in 1995 for the People’s Republic of China
under section 402(d) of the Trade Act of 1974, the Presi-
dent shall, during the 30-day period beginning on the date
that the President would have recommended to the Con-
gress that such a waiver be continued, undertake efforts
to ensure that members of the General Agreement on Tar-
iffs and Trade take a similar action with respect to the
People’s Republic of China.
Æ
HR 4590 IH——2
HR 4590 IH——3