[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 414 Engrossed in House (EH)]


                 In the House of Representatives, U.S.,

                                                      October 29, 2003.
Whereas United States investors and exporters to the People's Republic of China 
        recognize the opportunity of doing business with China but have raised 
        serious concerns that many of the commitments China made upon joining 
        the World Trade Organization have not yet been implemented or 
        implementation has been inadequate;
Whereas market barriers and unfair trade practices continue to exist, including 
        high tariffs, subsidies, technical trade restrictions, counterfeiting, 
        tied trade, violations of intellectual property rights, and nonmarket-
        based industrial policies that limit United States exports;
Whereas increases in global trade will lead to faster growth of the United 
        States economy and an improved quality of life for workers in the 
        People's Republic of China;
Whereas China is one of the fastest-growing economies in the world and an 
        important expanding market for United States exports;
Whereas China has made progress in implementing the commitments that it made 
        upon joining the World Trade Organization, including the required 
        reduction of its tariffs on many industrial goods of importance to 
        United States manufacturers;
Whereas China must move more quickly to implement its World Trade Organization 
        commitments fully and to remove many market access barriers;
Whereas the currency of the People's Republic of China, the renminbi, has been 
        fixed relative to the United States dollar since 1994;
Whereas a systemically misvalued currency by any large country can have damaging 
        trade-distorting effects on both that country and its trading partners 
        by decreasing the price of exports of products of that country and 
        increasing the price of imports to that country;
Whereas China's trade liberalization will cause economic imbalances in its 
        market and world markets unless China also implements capital account 
        liberalization;
Whereas the market-based valuation of currencies is a key component to resilient 
        global trading systems by enabling smoother transitions to reflect 
        underlying economic fundamentals in a country;
Whereas China's substantial foreign reserves reduce China's susceptibility to 
        currency crises and, therefore, the need for continued use of a fixed 
        currency;
Whereas the International Monetary Fund (IMF) has advised China to adopt a more 
        flexible exchange rate policy, and has indicated that such a change 
        would not have serious adverse consequences for that country, although 
        IMF officials have expressed concern about the weakness of China's 
        banking system and that it may not have the ability to move quickly 
        towards a floating rate;
Whereas the Joint Ministerial Statement in September 2003 of the Asia-Pacific 
        Economic Cooperation Finance Ministerial Meeting ``emphasized the 
        importance of accelerating structural reform, adopting macroeconomic 
        policies that promote sustainable growth, supported by appropriate 
        exchange rate policies that facilitate orderly and balanced external 
        adjustment . . . [and] noted a view expressed at the meeting that more 
        flexible exchange rate management, in some cases, would promote this 
        objective'';
Whereas the Group of Seven Finance Ministers and Central Bank Governors in their 
        September 2003 Communique have emphasized that ``more flexibility in 
        exchange rates is desirable for major countries or economic areas to 
        promote smooth and widespread adjustments in the international financial 
        system, based on market mechanisms'';
Whereas China's central bank governor has stated that the value of the renminbi 
        will eventually be determined by market forces rather than be fixed to 
        the dollar but has not given any indication of when this change in 
        policy will occur;
Whereas China recognizes that it is in its own interest to reform its exchange 
        rate regime and its banking system in order to establish a resilient 
        economy and control its rate of economic expansion;
Whereas China is taking concrete steps to move to a more flexible exchange rate 
        regime by increasing private ownership of its banking system and by 
        establishing a technical working group on a range of financial sector 
        issues, including exchange rate policy;
Whereas manufacturing is important to the health of the United States economy, 
        generating high quality products, personal opportunity, productive 
        careers, wealth, high standards of living, and economic growth;
Whereas the manufacturing sector is the leading source of new patents and 
        innovation in the United States economy, which helps drive economic 
        growth at home and abroad;
Whereas the manufacturing sector faces the most intense global competition in 
        United States history, making it difficult for many firms to operate 
        profitably and earn a sufficient return on capital invested, and 
        manufacturing costs continue to increase for many reasons, including 
        governmental actions; and
Whereas the manufacturing sector in the United States seeks a global level 
        playing field for competition and markets: Now, therefore, be it
    Resolved, That--
            (1) the House of Representatives commends the President and his 
        Administration for continued efforts to engage the Government of the 
        People's Republic of China directly and to encourage China to fulfill 
        its commitments as a member of the World Trade Organization;
            (2) the House of Representatives encourages the People's Republic of 
        China to meet its commitments to the trade rules and principles of the 
        international community of which it is now a member;
            (3) the Chinese economy would benefit from an exchange rate 
        determined by the market in order to avoid artificial rates that can 
        lead to market and trade distortions;
            (4) the House of Representatives will continue to monitor closely 
        and work with the Administration to encourage China's efforts to 
        modernize its financial system, establish a more flexible exchange rate, 
        and comply with its trade agreement obligations;
            (5) the House of Representatives urges the Administration to 
        continue its intensive discussions with officials from the Government of 
        the People's Republic of China to facilitate moves towards a market-
        based valuation of the renminbi, relaxation of capital controls, and 
        reform of its banking sector; and
            (6) manufacturing is an important sector to the United States 
        economy and, therefore, the United States Government should intensify 
        efforts to promote innovation, reduce costs, and level the international 
        playing field for this sector.
            Attest:

                                                                          Clerk.