Whereas the bilateral trade and economic relationship between the United States and the People’s Republic of China is heavily imbalanced and undermining the long-term economic health of the United States;
Whereas the 2004 Report to the Congress of the United States-China Economic and Security Review Commission states that in 2003 the United States trade deficit in goods with China reached $124,000,000,000, with Chinese imports to the United States outnumbering United States exports to China by more than five to one;
Whereas the Commission’s 2004 Report makes several recommendations to correct this imbalance in the bilateral trade and economic relationship between the United States and China;
Whereas the Commission’s 2004 Report also finds that the Government of China has not satisfactorily adhered to the commitments it made in order to accede to membership into the World Trade Organization (WTO) and has failed to carry out many of the significant market-opening reforms it promised;
Whereas the Commission’s 2004 Report further states that a key contributing factor to the [United States trade] deficit is the undervaluation of the Chinese yuan against the U.S. dollar
and that the Government of China continues to heavily subsidize its manufacturing sector through such means as tax incentives, preferential access to credit and capital from state-owned financial institutions, subsidized utilities, and other measures;
Whereas the large and rapidly expanding United States trade deficit in goods with China is contributing to the erosion of the United States manufacturing sector; and
Whereas this imbalance in the bilateral trade and economic relationship between the United States and China has negative implications for the national security of the United States: Now, therefore, be it
1.Establishment of plan to implement recommendations of the United States-China Economic and Security Review Commission
(a)The President is strongly urged to take immediate steps to establish a plan to implement the recommendations contained in the 2004 Report to the Congress of the United States-China Economic and Security Review Commission in order to correct the current imbalance in the bilateral trade and economic relationship between the United States and the People’s Republic of China.
(b)Such plan should contain the following:
(1)Actions to address China’s policy of undervaluing its currency, to encourage China to provide for a substantial upward revaluation of the Chinese yuan against the United States dollar and to re-peg the yuan to a trade-weighted basket of currencies, and to concurrently encourage United States trading partners with similar interests to join in these efforts.
(2)Actions to make more use of the World Trade Organization (WTO) dispute settlement mechanism and applicable United States trade laws to redress unfair Chinese trade practices, including China’s exchange rate manipulation, denial of trading and distribution rights, lack of intellectual property rights protection, objectionable labor standards, subsidies to export industries, forced technology transfers used as a condition of doing business, and using the United States Trade Representative to consult with trading partners who have mutual interests at the outset of each new trade dispute with China.
(3)Actions by the United States Trade Representative and other appropriate United States Government officials to ensure that the World Trade Organization’s Transitional Review Mechanism process is a meaningful multilateral review that measures China’s compliance with its WTO commitments and to work with the European Union, Japan, and other major trading partners to produce a separate, unified annual report that measures and reports on China’s progress toward compliance and coordinates a plan of action to address China’s shortcomings.
(4)(A)Actions to address the governance and security concerns relating to China’s outreach to the global capital markets, including the need for the United States Trade Representative and the Department of Commerce to undertake immediately a comprehensive investigation of China's system of government subsidies for manufacturing, including tax incentives, preferential access to credit and capital from state-owned financial institutions, subsidized utilities, investment conditions requiring technology transfers, discriminatory consumption credits that shift demand toward Chinese goods, Chinese state-owned banks’ practice of noncommercial-based policy lending to state-owned and other enterprises, and China’s dual pricing system for coal and other energy sources.
(B)A report to be submitted to Congress by the Department of Commerce not later than 90 days after the date of the adoption of this concurrent resolution that (i) will contain the results of the actions described in subparagraph (A), (ii) will assess whether any of China’s practices described in such subparagraph may be actionable subsidies under the World Trade Organization, and (iii) will describe specific steps that the United States will take to address these practices.
(5)Actions to address China’s coordinated national strategy for technology development and to establish and publish a coordinated, comprehensive national policy and strategy designed to meet China’s challenge to the maintenance of United States scientific and technological leadership and competitiveness.
(6)Any additional actions outlined by the United States-China Economic and Security Review Commission in its 2004 Report to the Congress that affects the economic relationship between the United States and China.