Title: Affirming that all Chinese companies, private and state-owned, are under the effective control of the Chinese Communist Party.
Policy area: International Affairs

Summary:
This resolution encourages the United Kingdom to exclude high-risk telecommunications vendors, specifically Huawei, from involvement in the development of its 5G infrastructure. The resolution cautions that telecommunications networks that incorporate products developed by Chinese companies face technological and geopolitical risks. The resolution also urges the United States and its allies to develop a concerted strategy to counter Chinese companies' legal obligation to carry out potentially malign activities on behalf of the Chinese government.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 827 Introduced in House (IH)]

<DOC>






116th CONGRESS
  2d Session
H. RES. 827

  Affirming that all Chinese companies, private and state-owned, are 
      under the effective control of the Chinese Communist Party.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 3, 2020

Mr. McCaul (for himself, Ms. Cheney, Mr. Turner, Mr. Gallagher, and Mr. 
  Yoho) submitted the following resolution; which was referred to the 
                      Committee on Foreign Affairs

_______________________________________________________________________

                               RESOLUTION


 
  Affirming that all Chinese companies, private and state-owned, are 
      under the effective control of the Chinese Communist Party.

Whereas the United States and the United Kingdom have a special relationship and 
        shared history of fighting totalitarianism and communism regardless of 
        cost;
Whereas the decision by the British National Security Council to allow Huawei 
        into its fifth-generation (5G) telecommunication network is deeply 
        concerning to the United States;
Whereas banning Huawei from ``sensitive parts'' of the network, known as the 
        core, and capping Huawei's market share at 35 percent is not enough to 
        ensure the security and fidelity of the United Kingdom's 5G network;
Whereas in order to realize the full potential of 5G, there will be no means to 
        isolate one part of the network from other components; therefore, 
        granting an untrusted provider access to any portion of the network 
        inevitably risks opening access to the entire network, including the 
        ability to take the entire network offline and deny the United Kingdom 
        strategically important services;
Whereas the United Kingdom's Telecom Supply Chain Review requires the United 
        Kingdom to consider, with respect to a high-risk vendor such as Huawei, 
        the ``domestic security laws in the jurisdiction where the vendor is 
        based. . . .'';
Whereas the political economy and laws and regulations of the People's Republic 
        of China (PRC) are an affront to the democratic values shared by the 
        United States and the United Kingdom;
Whereas under the leadership of General Secretary Xi Jinping, the unelected 
        Chinese Communist Party (CCP) leads everything;
Whereas, according to the Fourth Plenum Decision Document, the CCP aims to 
        ``perfect the Party leadership over the National People's Congress, 
        government, supervision organs, trial organs, inspection organs, armed 
        forces, people groups, companies and institutions, grass roots 
        organizations, and social groups.'';
Whereas the CCP oversees the economic and technology policies of the People's 
        Republic of China, directs all legal and regulatory authorities, and 
        exerts direct and indirect influence over all companies in the PRC--
        state-owned and private;
Whereas the CCP has codified into law its authority to interfere in and 
        influence the operations of companies operating within and outside of 
        the PRC and demand access to any data stored in or transiting through 
        its network equipment;
Whereas Article 30 of the CCP Constitution requires a CCP cell to be formed in 
        any company where there are three of more CCP members;
Whereas Article 15 of Regulations of the CCP on the Work of Grassroots 
        Organizations in State Owned Enterprise requires all important operating 
        and management issues to be discussed by the Party Committee, and only 
        after be decided on by the board of directors or management;
Whereas Article 19 of China's Company Law requires every company to establish a 
        CCP cell and carry out CCP activities and to provide necessary 
        conditions for CCP cell activities;
Whereas Article 26 of the Guideline on Improving Business Conditions for Private 
        Enterprises calls on private businesses to support Party construction;
Whereas, in addition to inserting itself directly into company operations 
        through CCP cells and ownership stakes, the CCP is erecting a legal and 
        regulatory system that in effect gives it direct influence over a 
        company's operations and access to all its personal and business 
        information, thereby turning nominally private companies into resources 
        for and tools of the CCP;
Whereas the PRC's National Security Law declares nearly any issue--from the 
        economy to technology and information to ideology--a matter of national 
        security and intelligence work;
Whereas the PRC's Cybersecurity Law gives the CCP expansive powers over how 
        information technology products are approved and where data and 
        information are stored, including--

    (1) Articles 22 and 23 which require network products and services to 
adhere to mandatory national standards and obtain certain certifications, 
many of which require the disclosure of proprietary information, such as 
source code, and the use of indigenously innovated Chinese intellectual 
property;

    (2) Article 28 which mandates any network operator to provide technical 
support and assistance to public security and national security organs; and

    (3) Article 37 which sets forth broad requirements for data and 
information to be stored within the boundaries of the PRC;

Whereas the National Intelligence Law gives Chinese intelligence agencies 
        authority to compel private companies to support intelligence 
        operations, including Article 7, which requires an organization or 
        citizen to support, assist, and cooperate with state intelligence work, 
        and Article 14, which demands that organizations provide support, 
        assistance, and cooperation to intelligence organs;
Whereas Article 22 of China's Counterespionage Law states that when agencies are 
        investigating espionage activities and collecting evidence, 
        organizations and individuals must not refuse to provide it information;
Whereas Article 18 of the Anti-Terrorism Law states that telecommunications 
        business operators and internet service providers shall provide 
        technical interfaces, decryption, and other technical support and 
        assistance for public security organs and state security organs to 
        prevent and investigate terrorist activities in accordance with the law;
Whereas Article 31 of the Encryption Law provides for government inspections of 
        commercial encryption that, when used in concert with other laws and 
        regulations, could result in full access of encrypted servers and 
        decryption keys by the CCP;
Whereas several provisions in the Ministry of Public Security Regulation on 
        Internet Security Supervision and Inspection give security organs the 
        right to conduct onsite and remote inspections of company networks--
        including technical aspects of its operations and the data and 
        information stored on its servers--and allows authorities to copy any 
        information on corporate servers;
Whereas these and other laws, regulations, and standards combined with the 
        Internet+ initiative, the social credit system for individuals and 
        companies, and other industrial and sector-specific plans form the 
        foundation for the PRC's authoritarian digital governance model that it 
        is aggressively exporting around the world;
Whereas the PRC's authoritarian model puts absolute control of the digital 
        economy, including its hardware, software, algorithms, encryption, data, 
        and other proprietary information, into the hands of the CCP, removing 
        any semblance of privacy; and
Whereas General Secretary Xi Jinping has said ``high-end technology is the 
        weapon of a modern country'' and the CCP has clearly demonstrated its 
        ambition to attack global markets with its products and services to make 
        the world safe for its authoritarian model and dependent on its 
        technologies: Now, therefore, be it
    Resolved, That it is the sense of the House of Representatives 
that--
            (1) the Parliament of the United Kingdom of Great Britain 
        and Northern Ireland is encouraged to reject or amend the 
        National Security Council's decision on telecommunications 
        security in a manner that excludes high-risk vendors, such as 
        Huawei, from the country's 5G infrastructure;
            (2) Huawei's track-record of illegal and corrupt behavior 
        is endemic to their operations;
            (3) whether state-owned or nominally private, all Chinese 
        companies, including Huawei, operate within a political and 
        regulatory environment that removes their ability to act 
        independently from or to refuse requests by the CCP;
            (4) this distinct state-led economy and communist political 
        system removes independent corporate governance and obscures 
        the true nature of Chinese corporate entities, harming the 
        transparency needed to maintain the international rules-based 
        system;
            (5) fifth-generation telecommunications networks that 
        incorporate products and services developed by Chinese 
        companies face significant technological, political, ethical, 
        and geopolitical risk; and
            (6) the United States Government and its allies and 
        partners must work expeditiously to develop and implement a 
        concerted strategy, using all tools available, to combat what 
        amounts to legal warfare by the Chinese government to weaponize 
        its companies when needed.
                                 <all>