[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2196 Introduced in House (IH)]







105th CONGRESS
  1st Session
                                H. R. 2196

    To reduce the Federal funds to be provided to any international 
   financial institution by the United States portion of any subsidy 
     provided by the institution to the People's Republic of China.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 17, 1997

   Mr. Solomon (for himself, Mr. Cox of California, Mr. Gilman, Mr. 
 Spence, Mr. Rohrabacher, Mr. McIntosh, Mr. Gibbons, and Mr. Shadegg) 
 introduced the following bill; which was referred to the Committee on 
                     Banking and Financial Services

_______________________________________________________________________

                                 A BILL


 
    To reduce the Federal funds to be provided to any international 
   financial institution by the United States portion of any subsidy 
     provided by the institution to the People's Republic of China.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Communist China Subsidy 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 commercial 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 Republic 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 securities 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, entities 
        controlled by the Government of the People's Republic of China 
        have issued 75 bonds since 1988, including 36 dollar-
        denominated bond offerings valued 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 People's 
        Republic of China received almost $1,000,000,000 in foreign aid 
        grants and an additional $1,566,000,000 in technical assistance 
        grants from 1993 through 1995, and in 1995 received 
        $5,540,000,000 in bilateral assistance loans, including 
        concessional aid, export credits, and related assistance; and
            (7) regarding international financial institutions--
                    (A) despite the People's Republic of China's access 
                to international capital and world financial markets, 
                international financial institutions have annually 
                provided it with more than $4,000,000,000 in loans in 
                recent years, amounting to almost a third of the loan 
                commitments of the Asian Development Bank and 17.1 
                percent of the loan approvals by the International Bank 
                for Reconstruction and Development in 1995; and
                    (B) the People's Republic of China borrows more 
                from the International Bank for Reconstruction 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. FEDERAL FUNDS FOR EACH INTERNATIONAL FINANCIAL INSTITUTION TO 
              BE REDUCED BY THE UNITED STATES PORTION OF SUBSIDIES 
              PROVIDED BY THE INSTITUTION TO THE PEOPLE'S REPUBLIC OF 
              CHINA.

    (a) Determination.--Not later than May 1 of each year, the 
Secretary of the Treasury shall determine, with respect to each 
international financial institution (as defined in section 1702(c)(2) 
of the International Financial Institutions Act) the amount of the 
United States portion of any subsidy (whether direct or indirect, or in 
the form of loans, cash, or in-kind assistance) provided by the 
institution during the then most recently completed fiscal year of the 
institution, to the People's Republic of China, any citizen or national 
of the People's Republic of China, or any entity established in the 
People's Republic of China.
    (b) Reduction in United States Payments.--The Secretary of the 
Treasury shall reduce the amount that would otherwise be paid by the 
United States to an international financial institution (as defined in 
section 1702(c)(2) of the International Financial Institutions Act) 
during a fiscal year by an amount equal to the amount determined under 
subsection (a) of this section with respect to the institution for the 
then most recently completed fiscal year of the institution.
    (c) Subsidy Defined.--As used in this section, the term ``subsidy'' 
includes a loan made on terms not available from a private lending 
institution.
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