[Congressional Bills 104th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 461 Engrossed in House (EH)]


                 In the House of Representatives, U.S.,

                                                         June 27, 1996.
Whereas the People's Republic of China has long enjoyed most favored nation 
        trading status with the United States notwithstanding significant policy 
        and security issues in our bilateral relationship;
Whereas, despite the positive influence that United States trade with the 
        People's Republic of China has had in encouraging the abandonment of 
        state control over all aspects of the economy by the Communist 
        government, serious human rights, trade, security, and weapons 
        proliferation issues have remained and often worsened during the period 
        of this trade policy;
Whereas this experience has made clear that of itself, the extension of most 
        favored nation trading status (and the potential of its annual non-
        renewal) has been inadequate to address the many policy and security 
        issues that characterize our bilateral relationship;
Whereas these policy and security issues include, with regard to the economic 
        activities of the People's Liberation Army--

    (1) according to the Defense Intelligence Agency, the People's 
Liberation Army of Communist China is in fact engaged, through controlled 
enterprises, in government-controlled and subsidized trade overseas;

    (2) the General Staff Department of the People's Liberation Army owns 
and operates Polytechnologies, which is the weapons trading arm of the 
People's Liberation Army. Polytechnologies has a representative office in 
the United States;

    (3) the General Logistics Department of the People's Liberation Army 
owns and operates a large international conglomerate known as Xinxing 
Corporation, which has a representative office in the United States;

    (4) the People's Armed Police, which is partially controlled by the 
People's Liberation Army, is responsible for the occupation and suppression 
of dissent in Tibet and the execution of prisoners throughout China, 
provides guards for the forced labor camp system in Communist China, and 
owns and operates China Jingan Equipment Import and Export, which has a 
representative office in the United States;

    (5) the export of products by these entities allows the People's 
Liberation Army to earn hard currency directly, which in turn can be and is 
used to modernize its forces without being reflected in official reports of 
military spending;

    (6) consumers in the United States are ordinarily unaware that revenues 
from the products they are purchasing from or through such entities 
contribute to the financial benefit of the People's Liberation Army;

    (7) trade with the People's Liberation Army effectively is a subsidy of 
military operations of the People's Republic of China that is inconsistent 
with our national security; and

    (8) free trade in world markets is based on the assumption that the 
import and export of goods and services are conducted by independent 
enterprises responding to profit incentives and market forces, and 
commercial activities by the People's Liberation Army are fundamentally 
inconsistent with these precepts;

Whereas, with regard to Communist Chinese military activity and weapons 
        proliferation--

    (1) it has been reported that United States intelligence has estimated 
that Communist Chinese military industries have become a leading supplier 
of illicit precursor chemicals for use in Iran's chemical weapons program;

    (2) in contravention of Communist China's commitment to the Treaty on 
Non-Proliferation of Nuclear Weapons (NPT), the China National Nuclear 
Corporation, a Communist Chinese military industry, sold materials critical 
to the production of enriched uranium to a non-NPT signatory, Pakistan;

    (3) China National Precision Instrument Import-Export Company, a 
Communist Chinese military industry, sold nuclear-capable missiles to 
Pakistan;

    (4) China Great Wall Industry Corporation, a Communist Chinese military 
industry, sold nuclear-capable missiles to Pakistan;

    (5) Poly Group, a People's Liberation Army owned company, sold 
$1,200,000,000 worth of arms to the military rulers of Myanmar (Burma);

    (6) In contravention of the United Nations embargo, China North 
Industries Corporation (Norinco), a Communist Chinese military industry, 
sold chemicals critical to the manufacture of nuclear weapons to Iraq;

    (7) Poly Group and Norinco, Communist Chinese military industries, 
attempted to sell 2,000 AK 47 rifles, 20,000 AK 47 bipods, 4,000 30 round 
ammunition magazines, and 2 machinegun silencers, and offered for sale 
300,000 silenced machineguns and ``Red Parakeet'' missiles (stingers), RPGs 
(rocket propelled grenades), 60mm mortars, and handgrenades to United 
States law enforcement authorities conducting a so-called ``sting'' 
operation;

    (8) according to the May 21, 1996, United States Customs Service 
affidavit against the Communist Chinese representatives of Norinco and Poly 
Group, at paragraph 96, one of the Communist Chinese representatives 
bragged that a ``Red Parakeet'' missile--which he was offering for sale in 
the United States--``could take out a 747'';

    (9) these and other enterprises owned by the People's Liberation Army 
and the Communist Chinese military industries regularly export a variety of 
products to the United States, including clothing, toys, shoes, hand tools, 
fish, minerals, and chemicals;

    (10) the People's Liberation Army implemented an unprovoked, dangerous, 
and aggressive campaign to intimidate Taiwan in July of 1995, and again 
before Taiwan's first direct presidential election in March of 1996, with 
military maneuvers, live-fire exercises, and missile tests in close 
proximity to that island democracy; and

    (11) the People's Liberation Army seized territory claimed by the 
Philippines and threatened the United States Navy's right of free passage 
in the South China Sea;

Whereas, with respect to human rights--

    (1) according to the United States Department of State's Country 
Reports on Human Rights for 1995, the Government of Communist China 
``continued to commit widespread and well-documented human rights abuses, 
in violation of internationally accepted norms, stemming both from the 
authorities' intolerance of dissent and the inadequacy of legal safeguards 
for basic freedoms. Abuses included arbitrary and lengthy incommunicado 
detention, forced confessions, torture, and mistreatment of prisoners . . . 
. The Government continued severe restrictions on freedom of speech, the 
press, assembly, association, religion, privacy, movement, and worker 
rights'';

    (2) in April 1996, the Communist Chinese Government launched a major 
anticrime campaign called ``Strike Hard'' carried out nationwide by the 
Public Security Bureau (PSB), and in Tibet and Xinjiang (East Turkestan) 
also by the People's Armed Police, which has included large scale arbitrary 
arrests, detentions with minimal legal protection, and swift executions;

    (3) the current anticrime campaign has targeted political, religious 
and labor activists in addition to common criminals in Tibet, Xinjiang, and 
in the whole of Communist China;

    (4) the Communist Government has ordered a crackdown on unofficial 
religious believers by the Religious Affairs Bureau and the Public Security 
Ministry, requiring all local congregations to register with the Religious 
Affairs Bureau or risk the legal dismantling of the congregation and 
official harassment, fines and arrest;

    (5) according to Asia Watch, the Communist Chinese authorities in Tibet 
have launched a repressive campaign against religious practice and the 
Public Security Bureau and PLA have been involved in violent suppression of 
dissent in Tibet and Xinjiang, resulting in the death or imprisonment of 
over one thousand Tibetans and Uighurs this year;

    (6) the Ministry of Public Security has imposed new regulations to 
strengthen controls over Internet use, the State Council must approve 
``interactive'' networks, and the official Communist Chinese news agency 
(Xinhua) has been put in charge of supervising all foreign wire services 
selling economic information to Communist China, censoring their reports 
for ``false economic news and attacks on Communist China'';

    (7) Wei Jingsheng, the leading Chinese pro-democracy activist, was 
sentenced on December 13, 1995, to a second 14-year prison term, after a 
sham trial in which he was denied access to counsel of his choice and given 
access to the actual charges against less than two days before trial;

    (8) on November 21, 1995, the Government of the People's Republic of 
China announced the arrest of Wei Jingsheng and its intention to try him 
for ``attempt[ing] to overthrow the government'';

    (9) the government had previously imprisoned Wei from 1979 until 1993 
on a charge of ``spreading counterrevolutionary propaganda'' for his 
peaceful participation in the Democracy Wall movement;

    (10) during his long imprisonment Wei was subjected to torture and 
other ill treatment which left him in extremely poor health;

    (11) far from advocating an ``overthrow'' of the Government of China, 
Wei has been a strong advocate of nonviolence and a peaceful transition to 
democracy; and

    (12) Wei was regarded as a leading contender for the 1995 Nobel Peace 
Prize, having been nominated by parliamentarians throughout the world, 
including 58 members of the United States Congress;

Whereas, with respect to Communist Chinese trade and economic policy--

    (1) the United States Trade Representative's 1996 National Trade 
Estimate Report on Foreign Trade Barriers notes that ``China continued to 
use standards and certification practices which the United States and other 
trading partners regard as barriers to trade'';

    (2) the report indicates that ``Despite its commitment under the 1992 
market access Memorandum of Understanding to publish all laws and 
regulations affecting imports, some regulations and a large number of 
directives have traditionally been unpublished, and there is no published, 
publicly available national procurement code in China'';

    (3) the report finds that ``China's market for services remains 
severely restricted'';

    (4) these practices limiting American access to Communist China's 
market have contributed to an increase in the United States trade deficit 
with China from $10 million in 1985 to $33,807,000,000 in 1995, according 
to the United States Department of Commerce;

    (5) these unfair trade practices and tariff and non-tariff barriers 
result in lost opportunities for American companies and lost jobs for 
American workers, and harm the United States economy;

    (6) the failure of Communist China to stop the piracy of intellectual 
property, including music, videos, books, and software required by the 
January 16, 1992, agreement on intellectual property rights, is evidenced 
by the necessity of further agreements (signed on March 11, 1995 and June 
17, 1996), and the threat of over $2,000,000,000 in sanctions as a means of 
achieving as yet hoped-for compliance with the agreements;

    (7) according to the United States Trade Representative's 1996 National 
Trade Estimate Report on Foreign Trade Barriers, investment restrictions by 
Communist China are ``abundant'';

    (8) under so-called ``export performance requirements,'' Communist 
Chinese authorities frequently force foreign manufacturers operating in 
Communist China to export 50 to 70 percent (and sometimes more) of their 
goods to other markets, as a condition of approving the investment;

    (9) two-thirds of Communist China's exports are, in fact, manufactured 
by foreign firms operating in Communist China;

    (10) the export performance requirements imposed on foreign investment 
by the Communist Chinese government serve to undercut domestic producers 
employing millions of Americans;

    (11) Communist China has failed to liberalize its foreign exchange 
market, and to make the Yuan fully convertible;

    (12) Communist China maintains two exchange rates for the Yuan, an 
official rate for Chinese citizens and a swap rate for foreigners, and 
regularly manipulates the exchange rate to the advantage of domestic 
exporting industries;

    (13) even with the establishment of currency swap markets, this gap 
between the official and swap rates serves as (a) a subsidy for Communist 
China's exporters to the United States, totaling nearly $15,000,000,000 in 
1993, and (b) a nontariff barrier to United States exports, artificially 
raising the price of exports in Communist China's market;

    (14) Communist China received over $4,000,000,000 in multilateral loans 
from the World Bank and the Asian Development Bank;

    (15) the United States is the largest shareholder in these banks, and 
thus can exercise considerable leverage over loans to Communist China; and

    (16) Communist China has continued to insist that Taiwan not be 
admitted to the WTO unless it is admitted simultaneously, notwithstanding 
the differences in the status of their compliance with the criteria for WTO 
membership;

Whereas given the number and gravity of these issues, the debate over Communist 
        China's most-favored-nation trade status cannot bear the weight of the 
        entire bilateral relationship between the United States and the People's 
        Republic of China; and
Whereas these issues should be promptly addressed by appropriate legislation: 
        Now, therefore, be it
    Resolved, The Committee on International Relations, the Committee 
on National Security, the Committee on Ways and Means, and the 
Committee on Banking and Financial Services will each hold hearings on 
the matters described in the preamble to this resolution insofar as 
those matters fall within their respective jurisdictions and, if 
appropriate, report legislation addressing these matters to the House 
of Representatives not later than Septem- ber 30, 1996.

            Attest:

                                                                 Clerk.