I 
116TH CONGRESS 
1ST SESSION 
H. R. 704 
To safeguard certain technology and intellectual property in the United States 
from export to or influence by the People’s Republic of China and 
to protect United States industry from unfair competition by the People’s 
Republic of China, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 22, 2019 
Mr. CONAWAY (for himself and Mr. RYAN) introduced the following bill; which 
was referred to the Committee on Ways and Means, and in addition to 
the Committees on Financial Services, the Judiciary, Foreign Affairs, and 
Oversight and Reform, for a period to be subsequently determined by the 
Speaker, in each case for consideration of such provisions as fall within 
the jurisdiction of the committee concerned 
A BILL 
To safeguard certain technology and intellectual property 
in the United States from export to or influence by 
the People’s Republic of China and to protect United 
States industry from unfair competition by the People’s 
Republic of China, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Fair Trade with China Enforcement Act’’. 
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(b) TABLE OF CONTENTS.—The table of contents for 
this Act is as follows: 
Sec. 1. Short title; table of contents. 
Sec. 2. Sense of Congress. 
Sec. 3. Statement of policy. 
TITLE 
I—SAFEGUARDS 
AGAINST 
FOREIGN 
INFLUENCE 
IN 
UNITED STATES NATIONAL AND ECONOMIC SECURITY BY THE 
PEOPLE’S REPUBLIC OF CHINA 
Sec. 101. Establishment of list of certain products receiving support from the 
Government of the People’s Republic of China pursuant to the 
Made in China 2025 policy. 
Sec. 102. Prohibition on export to the People’s Republic of China of national 
security sensitive technology and intellectual property. 
Sec. 103. Imposition of shareholder cap on Chinese investors in United States 
corporations. 
Sec. 104. Prohibition on use of certain telecommunications services or equip-
ment. 
TITLE II—FAIR TRADE ENFORCEMENT ACTIONS WITH RESPECT 
TO THE PEOPLE’S REPUBLIC OF CHINA 
Sec. 201. Countervailing duties with respect to certain industries in the Peo-
ple’s Republic of China. 
Sec. 202. Repeal of reduced withholding rates for residents of China. 
Sec. 203. Taxation of obligations of the United States held by the Government 
of the People’s Republic of China. 
Sec. 204. Surtax on certain income derived from China. 
TITLE III—STOPPING FOREIGN BUSINESSES SANCTUARY ACT OF 
2019 
Sec. 301. Short title. 
Sec. 302. Jurisdiction over certain foreign entities. 
Sec. 303. Commercial activity of affiliate entities. 
SEC. 2. SENSE OF CONGRESS. 
It is the sense of Congress that— 
(1) since joining the World Trade Organization 
in 2001, the People’s Republic of China has offered 
the United States a contradictory bargain, which 
promised openness in the global trade order, but 
through state mercantilism delivered a severely im-
balanced trading relationship; 
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(2) it was erroneous for the United States Gov-
ernment to have ignored the contradictions and risks 
of free trade with the People’s Republic of China on 
the assumption that the People’s Republic of China 
would liberalize economically and politically; 
(3) benefitting enormously from a more open 
global economy to drive its own industries, the Gov-
ernment of the People’s Republic of China and the 
Communist Party of the People’s Republic of China 
have only tightened their grip on power, brutally 
suppressing dissent at home and pursuing policies 
abroad that are a far cry from being a responsible 
global stakeholder; 
(4) malevolent economic behavior by persons in 
the People’s Republic of China is made clear by the 
theft of intellectual property from the United States, 
as Chinese theft of United States intellectual prop-
erty 
alone 
costs 
the 
United 
States 
nearly 
$600,000,000,000 annually, according to the United 
States Trade Representative; 
(5) stealing United States intellectual property 
advances the ‘‘Made in China 2025’’ initiative of the 
Government of the People’s Republic of China to 
eventually dominate global exports in 10 critical sec-
tors, namely artificial intelligence and next-genera-
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tion information technology, robotics, new-energy ve-
hicles, biotechnology, energy and power generation, 
aerospace, high-tech shipping, advanced railway, new 
materials, and agricultural machinery, among oth-
ers; 
(6) the targets of the Made in China 2025 ini-
tiative reveal the goal of the People’s Republic of 
China for the near-total displacement of advanced 
manufacturing in the United States; and 
(7) the United States Government should act to 
strengthen the position of the United States in its 
policy toward the People’s Republic of China in 
order to create a more balanced economic relation-
ship by safeguarding strategic assets from Chinese 
influence, reducing Chinese involvement in the 
United States economy, and encouraging United 
States companies to produce domestically, instead of 
in the People’s Republic of China. 
SEC. 3. STATEMENT OF POLICY. 
It is the policy of the United States— 
(1) to impose restrictions on Chinese invest-
ment in the United States in strategic industries 
targeted by the Made in China 2025 initiative set 
forth by the Government of the People’s Republic of 
China; 
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(2) to tax Chinese investment in the United 
States due to its negative effect on the United 
States trade deficit and wages of workers in the 
United States; 
(3) to increase the cost of transnational produc-
tion operations in the People’s Republic of China in 
a manner consistent with the economic cost of the 
risk of loss of unique access by the United States to 
intellectual property, technology, and industrial base; 
and 
(4) to support democratization in and the 
human rights of the people of Hong Kong, including 
the findings and declarations set forth under section 
2 of the United States-Hong Kong Policy Act of 
1992 (22 U.S.C. 5701). 
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TITLE I—SAFEGUARDS AGAINST 
FOREIGN 
INFLUENCE 
IN 
UNITED 
STATES 
NATIONAL 
AND ECONOMIC SECURITY BY 
THE PEOPLE’S REPUBLIC OF 
CHINA 
SEC. 101. ESTABLISHMENT OF LIST OF CERTAIN PRODUCTS 
RECEIVING SUPPORT FROM THE GOVERN-
MENT OF THE PEOPLE’S REPUBLIC OF CHINA 
PURSUANT TO THE MADE IN CHINA 2025 POL-
ICY. 
(a) IN GENERAL.—Chapter 8 of title I of the Trade 
Act of 1974 (19 U.S.C. 2241 et seq.) is amended by add-
ing at the end the following: 
‘‘SEC. 183. LIST OF CERTAIN PRODUCTS RECEIVING SUP-
PORT FROM THE GOVERNMENT OF THE PEO-
PLE’S REPUBLIC OF CHINA. 
‘‘(a) IN GENERAL.—Not later than 120 days after 
the date of the enactment of the Fair Trade with China 
Enforcement Act, and every year thereafter, the United 
States Trade Representative shall set forth a list of prod-
ucts manufactured or produced in, or exported from, the 
People’s Republic of China that are determined by the 
Trade Representative to receive support from the Govern-
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ment of the People’s Republic of China pursuant to the 
Made in China 2025 industrial policy of that Government. 
‘‘(b) CRITERIA FOR LIST.— 
‘‘(1) IN GENERAL.—The Trade Representative 
shall include in the list required by subsection (a) 
the following products: 
‘‘(A) Any product specified in the following 
documents set forth by the Government of the 
People’s Republic of China: 
‘‘(i) Notice on Issuing Made in China 
2025. 
‘‘(ii) China Manufacturing 2025. 
‘‘(iii) Notice on Issuing the 13th Five- 
Year National Strategic Emerging Indus-
tries Development Plan. 
‘‘(iv) Guiding Opinion on Promoting 
International 
Industrial 
Capacity 
and 
Equipment Manufacturing Cooperation. 
‘‘(v) Any other document that ex-
presses a national strategy or stated goal 
in connection with the Made in China 2025 
industrial policy set forth by the Govern-
ment of the People’s Republic of China, 
the Communist Party of China, or another 
entity or individual capable of impacting 
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the national strategy of the People’s Re-
public of China. 
‘‘(B) Any product receiving support from 
the Government of the People’s Republic of 
China that has or will in the future displace net 
exports of like products by the United States, 
as determined by the Trade Representative. 
‘‘(2) INCLUDED
PRODUCTS.—In addition to 
such products as the Trade Representative shall in-
clude pursuant to paragraph (1) in the list required 
by subsection (a), the Trade Representative shall in-
clude products in the following industries: 
‘‘(A) Civil aircraft. 
‘‘(B) Motor car and vehicle. 
‘‘(C) Advanced medical equipment. 
‘‘(D) Advanced construction equipment. 
‘‘(E) Agricultural machinery. 
‘‘(F) Railway equipment. 
‘‘(G) Diesel locomotive. 
‘‘(H) Moving freight. 
‘‘(I) Semiconductor. 
‘‘(J) Lithium battery manufacturing. 
‘‘(K) Artificial intelligence. 
‘‘(L) High-capacity computing. 
‘‘(M) Quantum computing. 
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‘‘(N) Robotics. 
‘‘(O) Biotechnology.’’. 
(b) CLERICAL AMENDMENT.—The table of contents 
for the Trade Act of 1974 is amended by inserting after 
the item relating to section 182 the following: 
‘‘Sec. 183. List of certain products receiving support from the Government of 
the People’s Republic of China.’’. 
SEC. 102. PROHIBITION ON EXPORT TO THE PEOPLE’S RE-
PUBLIC OF CHINA OF NATIONAL SECURITY 
SENSITIVE 
TECHNOLOGY 
AND 
INTELLEC-
TUAL PROPERTY. 
(a) IN GENERAL.—The Secretary of Commerce shall 
prohibit the export to the People’s Republic of China of 
any national security sensitive technology or intellectual 
property subject to the jurisdiction of the United States 
or exported by any person subject to the jurisdiction of 
the United States. 
(b) DEFINITIONS.—In this section: 
(1) INTELLECTUAL PROPERTY.—The term ‘‘in-
tellectual property’’ includes patents, copyrights, 
trademarks, or trade secrets. 
(2) NATIONAL
SECURITY
SENSITIVE
TECH-
NOLOGY OR INTELLECTUAL PROPERTY.—The term 
‘‘national security sensitive technology or intellectual 
property’’ includes the following: 
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(A) Technology or intellectual property 
that would make a significant contribution to 
the military potential of the People’s Republic 
of China that would prove detrimental to the 
national security of the United States. 
(B) Technology or intellectual property 
necessary to protect the economy of the United 
States from the excessive drain of scarce mate-
rials and to reduce the serious inflationary im-
pact of demand from the People’s Republic of 
China. 
(C) Technology or intellectual property 
that is a component of the production of prod-
ucts included in the most recent list required 
under section 183 of the Trade Act of 1974, as 
added by section 101(a), determined in con-
sultation with the United States Trade Rep-
resentative. 
(3) TECHNOLOGY.—The term ‘‘technology’’ in-
cludes goods or services relating to information sys-
tems, internet-based services, production-enhancing 
logistics, robotics, artificial intelligence, biotechnolo-
gy, or computing. 
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SEC. 103. IMPOSITION OF SHAREHOLDER CAP ON CHINESE 
INVESTORS IN UNITED STATES CORPORA-
TIONS. 
Section 13(d) of the Securities Exchange Act of 1934 
(15 U.S.C. 78m(d)) is amended by adding at the end the 
following: 
‘‘(7)(A) In this paragraph, the term ‘covered issuer’ 
means any issuer that produces components that may be 
used in the production of goods manufactured or produced 
in, or exported from, the People’s Republic of China and 
included in the most recent list required under section 183 
of the Trade Act of 1974, determined in consultation with 
the United States Trade Representative. 
‘‘(B) No covered issuer that is incorporated under the 
laws of a State, or whose principal place of business is 
within a State, may be majority-owned by a person whose 
principal place of business is in the People’s Republic of 
China. 
‘‘(C) The prohibition in subparagraph (B) shall apply 
to any acquisition on or after the date of enactment of 
this paragraph.’’. 
SEC. 104. PROHIBITION ON USE OF CERTAIN TELE-
COMMUNICATIONS 
SERVICES 
OR 
EQUIP-
MENT. 
(a) FINDINGS.—Congress makes the following find-
ings: 
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(1) In its 2011 ‘‘Annual Report to Congress on 
Military and Security Developments Involving the 
People’s Republic of China’’, the Department of De-
fense stated, ‘‘China’s defense industry has benefited 
from integration with a rapidly expanding civilian 
economy and science and technology sector, particu-
larly elements that have access to foreign technology. 
Progress within individual defense sectors appears 
linked to the relative integration of each, through 
China’s civilian economy, into the global production 
and R&D chain . . . Information technology compa-
nies in particular, including Huawei, Datang, and 
Zhongxing, maintain close ties to the PLA.’’. 
(2) In a 2011 report titled ‘‘The National Secu-
rity Implications of Investments and Products from 
the People’s Republic of China in the Telecommuni-
cations Sector’’, the United States China Economic 
and Security Review Commission stated that 
‘‘[n]ational security concerns have accompanied the 
dramatic growth of China’s telecom sector. . . . Ad-
ditionally, large Chinese companies—particularly 
those ‘national champions’ prominent in China’s 
‘going out’ strategy of overseas expansion—are di-
rectly subject to direction by the Chinese Communist 
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