I
105TH CONGRESS
1ST SESSION
H. R. 2605
To require the United States to oppose the making of concessional loans
by international financial institutions to any entity in the People’s Repub-
lic of China.
IN THE HOUSE OF REPRESENTATIVES
OCTOBER 2, 1997
Mr. SOLOMON introduced the following bill; which was referred to the
Committee on Banking and Financial Services
A BILL
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,
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,
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
(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-
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.’’.
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