IIA
105TH CONGRESS
1ST SESSION
H. R. 2605
IN THE SENATE OF THE UNITED STATES
NOVEMBER 7, 1997
Received; read twice and referred to the Committee on Foreign Relations
AN ACT
To require the United States to oppose the making of
concessional loans by international financial institutions
to any entity in 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,
HR 2605 RFS
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Communist China Sub-
sidy Reduction Act of 1997’’.
SEC. 2. FINDINGS.
The Congress finds that—
(1) the People’s Republic of China has enjoyed
ready access to international capital through com-
mercial loans, direct investment, sales of securities,
bond sales, and foreign aid;
(2) regarding international commercial lending,
the People’s Republic of China had $48,000,000,000
in loans outstanding from private creditors in 1995;
(3) regarding international direct investment,
international direct investment in the People’s Re-
public of China from 1993 through 1995 totaled
$97,151,000,000, 
and 
in 
1996 
alone 
totaled
$47,000,000,000;
(4) regarding investment in Chinese securities,
the aggregate value of outstanding Chinese securi-
ties currently held by Chinese nationals and foreign
persons is $175,000,000,000, and from 1993
through 
1995 
foreign 
persons 
invested
$10,540,000,000 in Chinese stocks;
(5) regarding investment in Chinese bonds, en-
tities controlled by the Government of the People’s
Republic of China have issued 75 bonds since 1988,
HR 2605 RFS
including 36 dollar-denominated bond offerings val-
ued at more than $6,700,000,000, and the total
value of long-term Chinese bonds outstanding as of
January 1, 1996, was $11,709,000,000;
(6) regarding international assistance, the Peo-
ple’s 
Republic 
of 
China 
received 
almost
$1,000,000,000 in foreign aid grants and an addi-
tional $1,566,000,000 in technical assistance grants
from 1993 through 1995, and in 1995 received
$5,540,000,000 in bilateral assistance loans, includ-
ing concessional aid, export credits, and related as-
sistance; and
(7) regarding international financial institu-
tions—
(A) despite the People’s Republic of Chi-
na’s access to international capital and world fi-
nancial markets, international financial institu-
tions have annually provided it with more than
$4,000,000,000 in loans in recent years,
amounting to almost a third of the loan com-
mitments of the Asian Development Bank and
17.1 percent of the loan approvals by the Inter-
national Bank for Reconstruction and Develop-
ment in 1995; and
HR 2605 RFS
(B) the People’s Republic of China bor-
rows more from the International Bank for Re-
construction and Development and the Asian
Development Bank than any other country, and
loan commitments from those institutions to the
People’s Republic of China quadrupled from
$1,100,000,000 in 1985 to $4,300,000,000 by
1995.
SEC. 3. OPPOSITION OF UNITED STATES TO CONCESSIONAL
LOANS TO THE PEOPLE’S REPUBLIC OF
CHINA.
Title XV of the International Financial Institutions
Act (22 U.S.C. 262o–262o–1) is amended by adding at
the end the following:
‘‘SEC. 
1503. 
OPPOSITION 
OF 
UNITED 
STATES 
TO
CONCESSIONAL LOANS TO THE PEOPLE’S RE-
PUBLIC OF CHINA.
‘‘(a) IN GENERAL.—The Secretary of the Treasury
shall instruct the United States Executive Directors at
each international financial institution (as defined in sec-
tion 1702(c)(2) of the International Financial Institutions
Act) to use the voice and vote of the United States to
oppose the provision by the institution of concessional
loans to the People’s Republic of China, any citizen or na-
HR 2605 RFS
tional of the People’s Republic of China, or any entity es-
tablished in the People’s Republic of China.
‘‘(b) CONCESSIONAL LOANS DEFINED.—As used in
subsection (a), the term ‘concessional loans’ means loans
with highly subsidized interest rates, grace periods for re-
payment of 5 years or more, and maturities of 20 years
or more.’’.
SEC. 4. PRINCIPLES THAT SHOULD BE ADHERED TO BY
ANY UNITED STATES NATIONAL CONDUCTING
AN INDUSTRIAL COOPERATION PROJECT IN
THE PEOPLE’S REPUBLIC OF CHINA.
(a) PURPOSE.—It is the purpose of this section to
create principles governing the conduct of industrial co-
operation projects of United States nationals in the Peo-
ple’s Republic of China.
(b) STATEMENT OF PRINCIPLES.—It is the sense of
the Congress that any United States national conducting
an industrial cooperation project in the People’s Republic
of China should:
(1) Suspend the use of any goods, wares, arti-
cles, or merchandise that the United States national
has reason to believe were mined, produced, or man-
ufactured, in whole or in part, by convict labor or
forced labor, and refuse to use forced labor in the
industrial cooperation project.
HR 2605 RFS
(2) Seek to ensure that political or religious
views, sex, ethnic or national background, involve-
ment in political activities or nonviolent demonstra-
tions, or association with suspected or known dis-
sidents will not prohibit hiring, lead to harassment,
demotion, or dismissal, or in any way affect the sta-
tus or terms of employment in the industrial co-
operation project. The United States national should
not discriminate in terms or conditions of employ-
ment in the industrial cooperation project against
persons with past records of arrest or internal exile
for nonviolent protest or membership in unofficial
organizations committed to nonviolence.
(3) Ensure that methods of production used in
the industrial cooperation project do not pose an un-
necessary physical danger to workers and neighbor-
ing populations or property, and that the industrial
cooperation project does not unnecessarily risk harm
to the surrounding environment; and consult with
community leaders regarding environmental protec-
tion with respect to the industrial cooperation
project.
(4) Strive to establish a private business enter-
prise when involved in an industrial cooperation
HR 2605 RFS
project with the Government of the People’s Repub-
lic of China or other state entity.
(5) Discourage any Chinese military presence
on the premises of any industrial cooperation
projects which involve dual-use technologies.
(6) Undertake to promote freedom of associa-
tion and assembly among the employees of the
United States national. The United States national
should protest any infringement by the Government
of the People’s Republic of China of these freedoms
to the International Labor Organization’s office in
Beijing.
(7) Provide the Department of State with infor-
mation relevant to the Department’s efforts to col-
lect information on prisoners for the purposes of the
Prisoner Information Registry, and for other report-
ing purposes.
(8) Discourage or undertake to prevent compul-
sory political indoctrination programs from taking
place on the premises of the industrial cooperation
project.
(9) Promote freedom of expression, including
the freedom to seek, receive, and impart information
and ideas of all kinds, regardless of frontiers, either
orally, in writing or in print, in the form of art, or
HR 2605 RFS
through any media. To this end, the United States
national should raise with appropriate authorities of
the Government of the People’s Republic of China
concerns about restrictions on the free flow of infor-
mation.
(10) Undertake to prevent harassment of work-
ers who, consistent with the United Nations World
Population Plan of Action, decide freely and respon-
sibly the number and spacing of their children; and
prohibit compulsory population control activities on
the premises of the industrial cooperation project.
(c) PROMOTION
OF PRINCIPLES
BY OTHER NA-
TIONS.—The Secretary of State shall forward a copy of
the principles set forth in subsection (b) to the member
nations of the Organization for Economic Cooperation and
Development and encourage them to promote principles
similar to these principles.
(d) REGISTRATION REQUIREMENT.—
(1) IN GENERAL.—Each United States national
conducting an industrial cooperation project in the
People’s Republic of China shall register with the
Secretary of State and indicate that the United
States national agrees to implement the principles
set forth in subsection (b). No fee shall be required
for registration under this subsection.
HR 2605 RFS
(2) 
PREFERENCE
FOR
PARTICIPATION
IN
TRADE MISSIONS.—The Secretary of Commerce shall
consult the register prior to the selection of private
sector participants in any form of trade mission to
China, and undertake to involve those United States
nationals that have registered their adoption of the
principles set forth above.
(e) DEFINITIONS.—As used in this section—
(1) the term ‘‘industrial cooperation project’’
refers to a for-profit activity the business operations
of which employ more than 25 individuals or have
assets greater than $25,000; and
(2) the term ‘‘United States national’’ means—
(A) a citizen or national of the United
States or a permanent resident of the United
States; and
(B) a corporation, partnership, or other
business association organized under the laws
of the United States, any State or territory
thereof, the District of Columbia, the Common-
wealth of Puerto Rico, or the Commonwealth of
the Northern Mariana Islands.
HR 2605 RFS
SEC. 5. PROMOTION OF EDUCATIONAL, CULTURAL, SCI-
ENTIFIC, AGRICULTURAL, MILITARY, LEGAL,
POLITICAL, AND ARTISTIC EXCHANGES BE-
TWEEN THE UNITED STATES AND CHINA.
(a) EXCHANGES BETWEEN
THE UNITED STATES
AND CHINA.—Agencies of the United States Government
which engage in educational, cultural, scientific, agricul-
tural, military, legal, political, and artistic exchanges shall
endeavor to initiate or expand such exchange programs
with regard to China.
(b) SENSE OF CONGRESS.—It is the sense of the
Congress that a federally chartered not-for-profit organi-
zation should be established to fund exchanges between
the United States and China through private donations.
Passed the House of Representatives November 6,
1997.
Attest:
ROBIN H. CARLE,
Clerk.