[Congressional Record Volume 143, Number 142 (Tuesday, October 21, 1997)]
[Senate]
[Pages S10892-S10897]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. LIEBERMAN (for himself, Mr. Hagel, Mr. Kerrey, and Mr. 
        Murkowski):
  S. 1303. A bill to encourage the integration of the People's Republic 
of China into the world economy, ensure United States trade interests, 
and establish a strategic working relationship with the People's 
Republic of China as a responsible member of the world community; to 
the Committee on Finance.


             THE UNITED STATES-CHINA RELATIONS ACT OF 1997

  Mr. LIEBERMAN. Mr. President, I am honored to be joined by my 
distinguished colleagues Senators Hagel, Kerrey, and Murkowski to 
introduce the United States-China Relations Act of 1997. I would also 
like to thank Congressman Bereuter whose bill H.R. 1712, we have 
included in this act. The United States-China Relations Act of 1997 is 
legislation that will set us on a course toward more fully integrating 
China into the international community of nations while protecting our 
national economic and political interests and preserving our values.
  We are at a critical juncture in our relations with the People's 
Republic of China. How we choose to manage China's emergence as a major 
global power will profoundly impact the shape of the international 
system in the 21st century, a situation not dissimilar to the late 19th 
and early 20th centuries when Germany, Japan, Russia, and the United 
States emerged to challenge Britain and France for world leadership.
  British and French diplomacy failed although their task was not an 
easy one. Two terrible wars stained the history of this century. We 
must try to do better. We must work to establish an acceptable 
framework for peacefully integrating China into the evolving 
international economic, security, and political systems. And the core 
question is whether to continue on our current path of cooperation and 
integration or choose the path of containment and isolation.
  During this session there has been much debate about which direction 
we should take in our relations with China. Most of the legislation 
that has been introduced regarding China has assumed the worst, 
centered on containment, and favored economic sanctions to remedy a 
host of Chinese transgressions. This policy of containment is 
ultimately premised on a view that China will be our next great enemy.
  Some of my colleagues ask us to pass laws that use punishment as the 
primary tool in our bilateral relationship. These proposals overlook a 
number of realities: the ineffectiveness and unproductiveness of 
punitive legislation in changing China; the importance of maintaining 
and fostering trust and confidence in such an important bilateral 
relationship; the real potential for retaliation by China; and the 
potential upsides of a constructive relationship with China. 
Ultimately, those bills proposing containment of China will neither 
achieve their stated aims of changing China's behavior nor promote 
America's more general national and international interests.
  The rest of the world will not join us in our effort to isolate 
China. That makes containment improbable. Our best policy option is to 
work to integrate China.
  Before rushing to any conclusions about China's intentions, it is 
helpful to take a closer look at its development over the past 20 
years. China has been engaged in a slow but steady effort to integrate 
itself into existing international systems. It has made efforts to be 
active in the United Nations, it has participated in a number of 
multilateral organizations, and has adapted some domestic institutions 
and policies to the demands of the international community.
  I visited China last March with my friend and distinguished 
colleague, Senator Connie Mack of Florida, and was struck by the 
revolutionary changes occurring there. This time the revolution is 
being driven not by Mao's

[[Page S10893]]

little red book, but by the mass quest for cellular telephones and 
personal computers, and incidentally, all the personal freedom of 
communication that goes with them.
  The central government in China is still not tolerant of opposition. 
Political and religious dissidents are in jail. On the other hand, 
average Chinese seem to have lost their fear of open and spirited 
conversations with Westerners. And Senator Mack found the Catholic 
churches during that Holy Week before Easter packed with worshipers.
  The Chinese Government has undertaken a slow but steady deregulation 
of the economy since it allowed for free enterprise in the countryside 
in 1982. Deregulation and the marketization of the Chinese economy has 
led to unprecedented improvements in the living standards--and 
purchasing power--of ordinary Chinese. In the past 15 years, China's 
per capita GDP has more than tripled, from $889 to $2,923, and is 
forecast to be $4,190 in 2000. Not uncoincidentally, China's demand for 
United States exports has increased in similarly substantial leaps. 
United States goods and services exports destined for China have 
increased from $3.7 million in 1980 to $11.1 billion in 1995. China is 
now America's fifth largest trading partner. Similarly, United States 
foreign direct investment in China has increased significantly.
  On the other hand, we have a large and growing trade deficit with 
China that is unacceptable. A prosperous and stable relationship will 
only continue for as long as we have fair access to China's markets.
  On balance, China's economic and political reforms are becoming more, 
not less, consistent with American core values. The transformation of a 
socialist command economy into a controlled market system has allowed 
for the emergence of a new class of entrepreneurs and has promoted 
individuals' freedom to decide what to consume, where to live, what to 
do as a livelihood. The State sector of the economy has steadily 
declined, and increasing numbers of Chinese now work for employers that 
do not answer directly to the central government or the Communist 
Party. This means that the Communist Party's ability to control and 
monitor individual's social, political, and economic lives has 
diminished substantially. Explicit political reforms have been fewer, 
but today there are more local elections being held in China than at 
any other time in its modern history. The legal system has been 
reinvented over the past two decades, and has seen in recent years 
substantial, though still inadequate, improvements in criminal 
procedure and judicial review of administrative abuses. It can be said 
in summary that, the reforms of the past two decades have led to 
increased personal liberty, a strengthened legal system, and the 
beginnings of a civil society, although there is still a very long way 
to go.

  In the clearest and most significant vote about China this year, a 
bipartisan majority in the House of Representatives chose to continue 
China's most-favored-nation trade status. But, after the vote, a flurry 
of bills were introduced expressing congressional opposition to China's 
economic, military, and human rights record. It is unfortunate that the 
Congress is sending mixed messages about this very important bilateral 
relationship.
  To encourage China's current path of reform and development and to 
help ensure that China's inevitable transformation into a global 
economic and strategic power occurs in a way not adverse to United 
States interests or values, the United States must have an active China 
policy that aims at integration instead of isolation, and relies on 
carrots rather than sticks.
  To ensure that our economic interests are met, we need to encourage 
China's increasing integration into international trade and investment 
regimes on commercially viable terms. This should help promote further 
liberalization of the Chinese economy while at the same time increasing 
American access to China's markets and thus decreasing the United 
States-China trade deficit. At the same time, the United States 
Government can more actively promote bilateral economic ties with those 
regions in China where human rights and labor conditions have shown 
improvement. Moreover, we should at every opportunity encourage China 
in the research and development of new energy efficiency and renewable 
energy technologies.
  China's integration in international regimes also promotes American 
strategic interests. The bilateral strategic relationship can be 
strengthened, however, by developing closer exchanges with the Chinese 
military leadership. By opening ongoing lines of communication with the 
military, we will be in a better position to obtain accurate 
information about China's military modernization program. Through such 
proactive measures we will be in a better position to make Beijing more 
accountable for its strategic weapons exports.
  It is time for Congress to end the ambivalence and build a consensus 
for a new China policy. Toward that end, along with my distinguished 
colleagues Senators Hagel, Kerrey, and Murkowski, I am today 
introducing the United States-China Relations Act of 1997.
  This legislation assumes that China will emerge as a superpower in 
the coming decades and become a nation with which the United States can 
and must have cooperative relationships --and that our relationships 
will be more cooperative if our economic, strategic, human rights, and 
environmental relations are viewed as distinct components of a larger, 
mutually-beneficial whole. It is based on a conclusion that China today 
is different from the China of the Cultural Revolution two decades ago 
and the China of Tiananmen Square a decade ago.
  Here are some of the key provisions of the United States-China 
Relations Act of 1997:
  Require an annual accounting of our economic relationship with China. 
Despite the growing significance of our trade relationship, barriers to 
U.S. exports should not be tolerated. The President would be required 
to submit an annual Economic Balance of Benefits Study to the Congress. 
The report would analyze the impact of existing bilateral trade 
agreements with China on United States employment, balance of trade, 
and United States international competitiveness.
  Encourage China's integration into multilateral economic 
organizations. Just as it is important to have enforcement sticks, 
there should be carrots to encourage China's international economic 
integration. The bill requires the President to develop criteria for 
support of China's participation in the Organization for Economic 
Cooperation and Development and G-7 meetings, two groups that China is 
far from being accepted into, but in which it aspires to membership.
  Give China permanent MFN upon accession to the WTO. First, I would 
like to credit Congressman Bereuter for this innovative idea. This 
provision seeks to induce China to grant United States exporters 
adequate trade benefits and/or make significant progress toward WTO 
membership by authorizing a tariff increase on imports from China if 
those conditions are not met and by granting permanent MFN status once 
China becomes a WTO member.
  Require greater information on energy and national security issues. 
The President should establish a bilateral United States-China 
committee on energy security and one for food security. These 
committees would help develop a bilateral policy for securing a stable 
supply of energy from politically volatile regions and securing food 
for China's large population. The bill also includes a sense-of-the-
Senate resolution that the President and Congress continue to expand 
contact and exchanges between United States and Chinese national 
security personnel.
  Establish a commission to promote the rule of law, respect for 
individual rights, religious tolerance, and civil society in China. 
This includes a bilateral commission on human rights with China; an 
exchange of legal professionals, government staff and religious 
leaders; and multilateral action on human and workers' rights. This 
last provision would include a prisoner information registry with 
information on all political prisoners, prisoners of conscience and 
prisoners of faith. The commission could recommend the imposition of 
specified sanctions to the President for human rights violations.
  There is one provision more than any other that characterizes the 
tone and thrust of this act. It calls for the formation of a commission 
to prepare a profile of China province by province.

[[Page S10894]]

 This profile then would serve as a basis for consideration of 
transactions with China by the Export-Import Bank and the Overseas 
Private Investment Corporation in those identified provinces.
  This provision is particularly helpful in improving and strengthening 
our relations with China. By opening up OPIC programs to regions that 
have acceptable human rights, labor, and environmental standards, we 
are increasing investment into China at the same time we are advancing 
our values. It is a provision that encourages China to improve its 
human rights record without punitive economic sanctions. It uses a 
carrot instead of a stick.
  America's economic and strategic interests, as well as our 
fundamental values, are best served by encouraging China on its path of 
economic and political reform.
  China's geopolitical and economic rise are inevitable developments. 
How we react to China's transformation and manage the bilateral 
relationship, however, is within our discretion. United States-China 
relations are at a critical turning point, and the real challenge 
before us now is how to peacefully integrate China into the world 
community, and work with China to ensure world prosperity and stability 
in the 21st century.
  Mr. President, I ask unanimous consent that the United States-China 
Relations Act of 1997 which I am proud to introduce with Senators 
Hagel, Kerrey, and Murkowski be placed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1303

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``United 
     States-China Relations Act of 1997''.
       (b) Table of Contents.--The table of contents for this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Declaration of policy.
Sec. 3. Definitions.

                    TITLE I--ECONOMIC NORMALIZATION

                     Subtitle A--General Provisions

Sec. 101. Congressional findings.
Sec. 102. Statements of policy.
Sec. 103. Reports to Congress.
Sec. 104. Bilateral economic relations.
Sec. 105. Multilateral economic relations.
Sec. 106. Use of funds for commercial and consular presence.

    Subtitle B--United States-China Trade and Investment Commission

Sec. 111. United States-China Trade and Investment Commission.
Sec. 112. Study and report.
Sec. 113. Powers of the Commission.
Sec. 114. Staff and consultants.
Sec. 115. Termination.
Sec. 116. Investment treatment for United States business.

                     TITLE II--STRATEGIC RELATIONS

Sec. 201. Congressional findings.
Sec. 202. Statements of policy.
Sec. 203. Reports to Congress.
Sec. 204. Bilateral strategic relations.
Sec. 205. Multilateral strategic relations.
Sec. 206. Enforcement of the Iran-Iraq Non-Proliferation Act.

                        TITLE III--HUMAN RIGHTS

                     Subtitle A--General Provisions

Sec. 301. Congressional findings.
Sec. 302. Statement of policy.
Sec. 303. Radio Free Asia; National Endowment for Democracy.
Sec. 304. Multilateral human rights.

                 Subtitle B--Human Relations Commission

Sec. 311. Human Relations Commission.
Sec. 312. Functions of the Commission.
Sec. 313. Staff.
Sec. 314. Termination.

     SEC. 2. DECLARATION OF POLICY.

       It is the policy of the United States to--
       (1) encourage the integration of the People's Republic of 
     China into the global economy and community of nations;
       (2) craft an economic, political, and strategic 
     relationship with the People's Republic of China which builds 
     mutual trust and encourages transparency;
       (3) cooperate with the People's Republic of China on 
     regional and global political and strategic issues, and to 
     encourage the constructive interdependence of the People's 
     Republic of China in the Asia Pacific region;
       (4) recognize the sovereignty of the People's Republic of 
     China, and oppose any unilateral change in the status quo of 
     ``one China policy'', especially with respect to the Republic 
     of China on Taiwan;
       (5) continue a close relationship with the Special 
     Administrative Region of Hong Kong; and
       (6) enforce the Hong Kong Policy Act and any other 
     provision that relates to the protection of civil liberties 
     and the rule of law in Hong Kong.

     SEC. 3. DEFINITIONS.

       In this Act:
       (1) Trade representative.--The term ``Trade 
     Representative'' means the United States Trade 
     Representative.
       (2) World trade organization.--The term ``World Trade 
     Organization'' means the organization established pursuant to 
     the WTO Agreement.
       (3) WTO agreement.--The term ``WTO Agreement'' means the 
     Agreement Establishing The World Trade Organization entered 
     into on April 15, 1994.
                    TITLE I--ECONOMIC NORMALIZATION
                     Subtitle A--General Provisions

     SEC. 101. CONGRESSIONAL FINDINGS.

       Congress makes the following findings:
       (1) The People's Republic of China is the world's tenth 
     largest trading nation and the United States' fifth largest 
     trading partner. United States exports to the People's 
     Republic of China have quadrupled over the past decade. At 
     least 170,000 Americans owe their jobs to United States 
     exports to the People's Republic of China. Jobs related to 
     exported goods, on average, pay 13 to 16 percent more than 
     nonexport related jobs.
       (2) The United States is the People's Republic of China's 
     largest export market. United States imports from the 
     People's Republic of China were nearly $51,500,000,000 in 
     1996 (or nearly 25 percent of the exports of the People's 
     Republic of China). By contrast, United States exports of 
     goods to the People's Republic of China stood at only 
     $12,000,000,000. While the large trade deficit with the 
     People's Republic of China is the result of many factors, the 
     People's Republic of China's multiple, overlapping barriers 
     to trade and investments are a serious concern.
       (3) In the coming decade, the rapid economic expansion of 
     the People's Republic of China will exert a powerful 
     influence on the global economy. In order to be constructive, 
     the emergence of the People's Republic of China as an 
     economic power should be compatible with the existing 
     multilateral economic regime.
       (4) Since the bilateral Memorandum of Understanding between 
     the United States and the People's Republic of China signed 
     in October 1992, the People's Republic of China has 
     eliminated import restrictions on more than 1,000 tariff 
     categories and opened its market to computers, heavy 
     machinery, and pharmaceutical products.
       (5) However, the People's Republic of China still maintains 
     many barriers to the sale of foreign products and United 
     States firms still do not have access comparable to that 
     which the People's Republic of China enjoys in the United 
     States. Sectors such as agriculture, telecommunications, 
     insurance, distribution, audio-visual, advertising, and 
     maintenance and repair need to be opened to international 
     trade.
       (6) Since 1995, the People's Republic of China has made 
     significant progress in concluding agreements in the 
     enforcement of intellectual property rights.
       (7) Despite significant improvements in enforcement, 
     serious problems still remain. Piracy of computer software 
     remains at high levels. While market access for copyrighted 
     products has improved, further improvement is required for 
     legitimate products to be available to meet market demand.

     SEC. 102. STATEMENTS OF POLICY.

       It is the policy of the United States--
       (1) to encourage a fair and equitable economic relationship 
     that ensures equal market access between the United States 
     and the People's Republic of China;
       (2) to support the accession of the People's Republic of 
     China to the World Trade Organization on commercially viable 
     terms, which include commitments on opening up the 
     agricultural market of the People's Republic of China, 
     concessions on trading rights, lower tariffs, access to 
     distribution networks, and elimination of import inhibiting 
     standards;
       (3) for importers of goods or services to affirm that such 
     products or services were not manufactured or procured in a 
     manner inconsistent with United States law or otherwise 
     incompatible with the values of the United States; and
       (4) for United States persons conducting business in the 
     People's Republic of China to refrain from using oppressive 
     instrumentalities of the state to oppose worker's efforts to 
     organize.

     SEC. 103. REPORTS TO CONGRESS.

       (a) In General.--Not later than 180 days after the date of 
     enactment of this Act, and annually thereafter, the Trade 
     Representative shall, in consultation with the International 
     Trade Commission and the Department of Commerce, prepare and 
     submit to Congress a study showing the economic benefits that 
     existing bilateral trade agreements between the United States 
     and the People's Republic of China have on United States 
     employment, balance of trade, and international 
     competitiveness.
       (b) Military Activities.--
       (1) In general.--The Secretary of State, in consultation 
     with the Secretary of Defense, the Secretary of Commerce, and 
     the head of any other appropriate intelligence agencies, 
     shall, not later than 180 days after the date of enactment of 
     this Act, and annually thereafter, prepare and submit to 
     Congress a report on the commercial activities of the 
     People's Liberation Army in the United States and the 
     People's Republic of China. The report shall highlight the 
     activities that provide off-budget revenue for military 
     modernization.
       (2) Confidentiality.--The Secretary of Defense, the 
     Secretary of Commerce, and the

[[Page S10895]]

     head of any intelligence agency may separately submit 
     information regarding the report to Congress in confidence if 
     such Secretary or agency head considers confidentiality 
     appropriate.

     SEC. 104. BILATERAL ECONOMIC RELATIONS.

       (a) Investment Treaty.--Not later than 180 days after the 
     date of enactment of this Act, the Trade Representative shall 
     assess the feasibility of entering into a bilateral 
     investment treaty with the People's Republic of China and 
     shall advise Congress of the results of the assessment.
       (b) Tax Treaty.--Not later than 180 days after the date of 
     enactment of this Act, the Secretary of the Treasury shall 
     assess the feasibility of entering into a bilateral tax 
     treaty with the People's Republic of China and shall advise 
     Congress of the results of the assessment.
       (c) Report on Joint Commissions.--
       (1) Review.--Not later than 180 days after the date of 
     enactment of this Act, and annually thereafter, the President 
     shall review the functions and objectives of each United 
     States-China Joint Commission and shall submit for 
     congressional review a program plan that identifies the 
     objectives of each Commission and the resources required to 
     achieve those objectives.
       (2) Joint commissions.--For purposes of this subsection, 
     the term ``United States-China Joint Commission'' means--
       (A) the United States-China Joint Commission on Commerce 
     and Trade,
       (B) the United States-China Joint Economic Commission, and
       (C) the United States-China Joint Commission on Science and 
     Technology.

     SEC. 105. MULTILATERAL ECONOMIC RELATIONS.

       (a) Statement of Purpose.--It is the purpose of this 
     section--
       (1) to authorize the President of the United States to 
     raise tariffs on imports from the People's Republic of China 
     to tariff levels in effect on December 31, 1994, if the 
     President determines, upon the expiration of the 1979 United 
     States bilateral agreement with the People's Republic of 
     China, that the People's Republic of China is either denying 
     adequate trade benefits to the United States or not taking 
     steps to become a full member of the World Trade 
     Organization;
       (2) to provide a significant incentive for the People's 
     Republic of China to gain admission to the World Trade 
     Organization by eliminating the annual review of China's 
     trade status after it commits to a commercially acceptable 
     protocol and is admitted to the World Trade Organization; and
       (3) therefore to enhance the ability of the President of 
     the United States to negotiate a commercially acceptable 
     World Trade Organization protocol with the People's Republic 
     of China.
       (b) Snap-Back Mechanism.--
       (1) Determination with respect to the people's republic of 
     china.--Upon the expiration of the 1979 United States 
     bilateral agreement with the People's Republic of China, the 
     President shall, after consulting with the appropriate 
     congressional committees, determine whether or not the 
     People's Republic of China is--
       (A) according adequate trade benefits to the United States, 
     including substantially equal competitive opportunities for 
     the commerce of the United States; and
       (B) taking adequate steps or making significant proposals 
     to become a WTO member.
       (2) Submission of findings.--Not later than 180 days after 
     the expiration of the 1979 United States bilateral agreement 
     with the People's Republic of China, the President shall 
     submit to the appropriate congressional committees a report 
     setting forth his determinations under subparagraphs (A) and 
     (B) of paragraph (1), with a rationale for each 
     determination.
       (3) Tariff increase.--
       (A) Imposition of increase.--If the President determines 
     either--
       (i) under subparagraph (A) of paragraph (1) that the 
     People's Republic of China is not according adequate trade 
     benefits to the United States, or
       (ii) under subparagraph (B) of paragraph (1) that the 
     People's Republic of China is not taking adequate steps or 
     making significant proposals to become a WTO member,

     then the President shall proclaim, within 180 days after the 
     date of that determination, an increase in the rate of duty 
     with respect to 1 or more products of that country to not 
     more than the column 1 rate of duty under the Harmonized 
     Tariff Schedule of the United States that applied to the 
     article or articles on December 31, 1994.
       (B) Termination of increase.--The President shall terminate 
     any increase in the rate of duty imposed under subparagraph 
     (A) on the earlier of--
       (i) the date on which the People's Republic of China 
     becomes a WTO member; or
       (ii) the date on which the President proclaims that--

       (I) the People's Republic of China is according adequate 
     trade benefits to the United States, including substantially 
     equal competitive opportunities for the commerce of the 
     United States; and
       (II) the People's Republic of China is taking adequate 
     steps or making significant proposals to become a WTO member.

       (C) Modification of tariff.--The President may modify any 
     increase in the rate of duty imposed under subparagraph (A) 
     if the President notifies the appropriate congressional 
     committees of the modification and the reasons therefor, 
     except that--
       (i) the modification may not result in a rate of duty 
     higher than that permitted under subparagraph (A); and
       (ii) the authority of this subparagraph may not be used to 
     terminate an increase in the rate of duty imposed under 
     subparagraph (A).
       (c) Accession to the World Trade Organization.--On the date 
     on which the People's Republic of China becomes a WTO member, 
     the provisions of title IV of the Trade Act of 1974 shall 
     cease to apply to that country, and nondiscriminatory 
     treatment shall apply to the products of that country.
       (d) Participation in OECD.--The President shall--
       (1) develop criteria for supporting the People's Republic 
     of China's participation in the Organization for Economic 
     Cooperation and Development and the G-7 meetings; and
       (2) when appropriate, initiate discussions with other 
     members of the Organization for Economic Cooperation and 
     Development and the G-7 regarding the People's Republic of 
     China's participation.
       (e) Definition.--As used in this section, the term ``WTO 
     member'' has the meaning given that term in section 2(10) of 
     the Uruguay Round Agreements Act (19 U.S.C. 3501(10)).

     SEC. 106. USE OF FUNDS FOR COMMERCIAL AND CONSULAR PRESENCE.

       Of the amounts authorized to be appropriated to the 
     Department of State under the appropriations account entitled 
     ``Administration of Foreign Affairs'' and of the amounts 
     appropriated to the Department of Commerce for the United 
     States and Foreign Commercial Service, $25,000,000 for fiscal 
     year 1999, and $75,000,000 for fiscal year 2000, may be used 
     to strengthen and expand the United States consular and 
     commercial presence in the People's Republic of China to 
     additional cities. The President, through the Director of the 
     Office of Management and Budget, shall determine the 
     allocation of funds to be used in any fiscal year to carry 
     out the provisions of this section.
    Subtitle B--United States-China Trade and Investment Commission

     SEC. 111. UNITED STATES-CHINA TRADE AND INVESTMENT 
                   COMMISSION.

       (a)  In General.--There is established a United States-
     China Trade and Investment Commission (referred to in this 
     title as the ``Commission'').
       (b) Membership.--
       (1) Composition.--The Commission shall be bipartisan and 
     composed of 17 members, including--
       (A) 3 individuals appointed by the President from the 
     executive branch of the government;
       (B) 2 individuals appointed by the President pro tempore of 
     the Senate, upon the recommendation of the majority and 
     minority leaders of the Senate;
       (C) 2 individuals appointed by the Speaker of the House of 
     Representatives, in consultation with the minority leader of 
     the House of Representatives;
       (D) 7 individuals from private business appointed by the 
     Secretary of Commerce; and
       (E) 3 individuals from nonprofit organizations appointed by 
     the Secretary of Commerce.
       (2) Appointment.--The members of the Commission shall be 
     appointed not later than 6 months after the date of enactment 
     of this Act.
       (c) Chairperson.--The Secretary of Commerce shall select a 
     Chairperson from among the private business members.
       (d) Term of Office.--Members shall be appointed for the 
     life of the Commission.
       (e) Vacancies.--Any vacancy occurring in the membership of 
     the Commission shall be filled in the same manner as the 
     original appointment for the position being vacated. The 
     vacancy shall not affect the power of the remaining members 
     to execute the duties of the Commission.
       (f) Compensation and Expenses.--
       (1) Compensation.--Each member of the Commission who is not 
     an employee of the Federal Government shall receive 
     compensation at the daily equivalent of the rate specified 
     for level V of the Executive Schedule under section 5316 of 
     title 5, United States Code, for each day the member is 
     engaged in the performance of duties for the Commission, 
     including attendance at meetings and conferences of the 
     Commission, and travel to conduct the duties of the 
     Commission.
       (2) Travel expenses.--Each member of the Commission shall 
     receive travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, for each day the member is engaged in the performance 
     of duties away from the home or regular place of business of 
     the member.

     SEC. 112. STUDY AND REPORT.

       (a) Study.--The Commission shall conduct a study of--
       (1) business practices employed by United States and 
     foreign persons conducting business in the People's Republic 
     of China;
       (2) human rights, labor, and environmental conditions in 
     each province of the People's Republic of China based on 
     criteria set forth in title IV of the Foreign Assistance Act 
     of 1961 (22 U.S.C. 2191 et seq.) relating to insurance, 
     financing, guarantees, and reinsurance by the Overseas 
     Private Investment Corporation;
       (3) other circumstances associated with the development of 
     rule of law and civil society in the People's Republic of 
     China;
       (4) opportunities for bilateral cooperation for improving 
     ecosystem management and

[[Page S10896]]

     pollution control, and for integrating policies that have 
     environmental impact in the People's Republic of China; and
       (5) opportunities for developing voluntary environmental 
     guidelines for industrial suppliers located in the People's 
     Republic of China, including the implementation of ISO 14000 
     environmental management standards of the International 
     Organization of Standards.
       (b) Report.--Not later than 12 months after the date of 
     enactment of this Act, and annually thereafter, the 
     Commission shall prepare and submit to the President and the 
     appropriate committees of Congress a written report 
     containing--
       (1) the findings and conclusions of the Commission 
     resulting from the study conducted under subsection (a);
       (2) the recommendations of the Commission, based on the 
     findings and conclusions described in paragraph (1), for--
       (A) improving opportunities for United States business in 
     the People's Republic of China; and
       (B) developing bilateral cooperation between the United 
     States and the People's Republic of China relating to labor 
     and environment; and
       (3) a list of provinces in the People's Republic of China 
     that meet the criteria of the Overseas Private Investment 
     Corporation for insurance, financing, guarantees, and 
     reinsurance described in subsection (a)(2).
       (c) Appropriate Committees.--For purposes of this section, 
     the term ``appropriate committees'' means the Committees on 
     Finance and Foreign Relations of the Senate and the 
     Committees on Ways and Means and International Relations of 
     the House of Representatives.

     SEC. 113. POWERS OF THE COMMISSION.

       (a) In General.--The Commission is authorized to--
       (1) hold such hearings and sit and act at such times;
       (2) take such testimony;
       (3) have such printing and binding done;
       (4) enter into such contracts and other arrangements;
       (5) make such expenditures; and
       (6) take such other actions;

     as the Commission may determine to be necessary to carry out 
     the duties of the Commission.
       (b) Obtaining Information From Federal Agencies.--The 
     Commission may secure directly from any Federal agency such 
     information as the Commission may require to carry out its 
     duties.
       (c) Gifts and Donations.--The Commission may accept, use, 
     and dispose of gifts or donations of property in order to 
     carry out the duties of the Commission.
       (d) Use of Mail.--The Commission may use the United States 
     mails in the same manner and under the same conditions as 
     Federal agencies.

     SEC. 114. STAFF AND CONSULTANTS.

       (a) Staff.--
       (1) Appointment and compensation.--The Commission may 
     appoint and determine the compensation of such staff as the 
     Commission determines to be necessary to carry out the duties 
     of the Commission.
       (2) Limitations.--The rate of compensation for each staff 
     member shall not exceed the daily equivalent of the rate 
     specified for level V of the Executive Schedule under section 
     5316 of title 5, United States Code, for each day the staff 
     member is engaged in the performance of duties for the 
     Commission. The Commission may otherwise appoint and 
     determine the compensation of staff without regard to the 
     provisions of title 5, United States Code, that govern 
     appointments in the competitive service, and the provisions 
     of chapter 51 and subchapter III of chapter 53 of title 5, 
     United States Code, that relate to classification and General 
     Schedule pay rates.
       (b) Experts and Consultants.--The Chairperson of the 
     Commission may obtain such temporary and intermittent 
     services of experts and consultants and compensate the 
     experts and consultants in accordance with section 3109(b) of 
     title 5, United States Code, as the Commission determines to 
     be necessary to carry out the duties of the Commission.
       (c) Detail of Federal Employees.--On the request of the 
     Chairperson of the Commission, the head of any Federal agency 
     shall detail, without reimbursement, any of the personnel of 
     the agency to the Commission to assist the Commission in 
     carrying out its duties. Any detail shall not interrupt or 
     otherwise affect the civil service status or privileges of 
     the Federal employee.
       (d) Technical Assistance.--On the request of the 
     Chairperson of the Commission, the head of a Federal agency 
     shall provide such technical assistance to the Commission as 
     the Commission determines to be necessary to carry out its 
     duties.

     SEC. 115. TERMINATION.

       The Commission shall terminate on the date that is 2 years 
     after the date of enactment of this Act.

     SEC. 116. INVESTMENT TREATMENT FOR UNITED STATES BUSINESS.

       (a) In General.--The Export-Import Bank, the Overseas 
     Private Investment Corporation, and other United States 
     agencies shall take into consideration the study and report 
     conducted under this subtitle in funding any transaction with 
     the People's Republic of China.
       (b) Amendment to Export-Import Bank Act.--Section 
     2(b)(2)(D)(i) of the Export-Import Bank Act (12 U.S.C. 
     635(b)(2)(D)(i)) is amended by adding at the end the 
     following new sentence: ``Subparagraph (A) shall not apply to 
     guarantees, insurance, or extensions of credit by the Bank to 
     a province of the People's Republic of China if the United 
     States-China Trade and Investment Commission determines that 
     the province meets the criteria for insurance, financing, 
     guarantees, and reinsurance of the Overseas Private 
     Investment Corporation set forth in title IV of the Foreign 
     Assistance Act of 1961.''.
       (c) Overseas Private Investment Corporation.--Section 239 
     of the Foreign Assistance Act of 1961 (22 U.S.C 2199) is 
     amended by adding at the end the following new subsection:
       ``(l) Notwithstanding any other provision of law, the 
     Corporation may insure, reinsure, guarantee, or finance a 
     project in the People's Republic of China if the United 
     States-China Trade and Investment Commission determines that 
     the province in which such project is located meets the 
     criteria for insurance, financing, guarantees, and 
     reinsurance set forth in this title.''.
                     TITLE II--STRATEGIC RELATIONS

     SEC. 201. CONGRESSIONAL FINDINGS.

       Congress makes the following findings:
       (1) The United States and the People's Republic of China 
     share mutual security interests in the Asia Pacific region 
     (including the Korean peninsula) as well as other areas of 
     the world such as the Middle East.
       (2) While the People's Liberation Army poses no direct 
     military threat to the United States now, its sales of 
     weapons and weapons technology to sponsors of terrorism, such 
     as Iran, endangers the regional stability and global 
     interests of the United States.
       (3) The People's Liberation Army is engaging in a military 
     buildup and an aggressive military modernization program, for 
     undisclosed purposes. In fact since 1992, military spending 
     by the People's Republic of China has doubled.
       (4) The People's Liberation Army is engaging in commercial 
     activities both at home and abroad. The revenues from these 
     commercial activities are used for military expenditures and 
     obscure actual military expenditures by the People's Republic 
     of China.
       (5) In March 1996, the People's Republic of China 
     demonstrated its capacity to blockade the international 
     shipping lanes of the Taiwan Strait and the air space over 
     Taiwan by the repeated launches of M-9 ballistic missiles in 
     the South China Sea.
       (6) In May 1996, Poly Technologies, a People's Liberation 
     Army enterprise, and Norinco, a Chinese civilian defense 
     company, attempted to smuggle 2,000 AK-47's into Oakland, 
     California and offered to sell to Federal undercover agents 
     300,000 machine guns with silencers, 66mm mortars, hand 
     grenades, and Red Parakeet surface-to-air missiles.
       (7) The People's Liberation Army's buildup, modernization, 
     and economic activities may pose a regional threat and a 
     threat to broader United States interests in the future 
     unless greater efforts are made to increase communication and 
     transparency of process.

     SEC. 202. STATEMENTS OF POLICY.

       It is the policy of the United States--
       (1) to encourage the political and military integration of 
     the People's Republic of China into the Asia Pacific region 
     and the larger global community of nations;
       (2) to maintain a strong United States presence in the Asia 
     Pacific region and to encourage cooperation between the 
     United States, the People's Republic of China, and other 
     nations;
       (3) to encourage transparency in military funding in the 
     People's Republic of China to the greatest extent possible; 
     and
       (4) to engage in confidence building measures between the 
     United States and the People's Republic of China in order to 
     reduce the risk of unintended conflict.

     SEC. 203. REPORTS TO CONGRESS.

       Not later than 180 days after the date of enactment of this 
     Act, the Secretaries of State, Defense, and Commerce, along 
     with the heads of other intelligence agencies, shall provide 
     Congress with--
       (1) a report analyzing the effectiveness of existing 
     weapons proliferation export controls and sanctions relating 
     to the People's Republic of China; and
       (2) a report describing economic, political, and military 
     espionage conducted by the People's Republic of China against 
     the United States.

     The Secretaries of State, Defense, and Commerce, and the head 
     of any other intelligence agency may separately submit any 
     information regarding the reports to Congress in confidence 
     if such Secretary or agency head considers confidentiality 
     appropriate.

     SEC. 204. BILATERAL STRATEGIC RELATIONS.

       (a) Sense of the Senate.--It is the sense of the Senate 
     that the President should continue and expand contact and 
     exchanges between national security personnel from the United 
     States and of the People's Republic of China.
       (b) Energy Bilateral.--The President shall take steps to 
     establish a bilateral committee with the People's Republic of 
     China in order to begin a dialogue relating to the 
     maintenance of stability in regions where there are energy 
     resources of mutual interest to the United States and the 
     People's Republic of China.
       (c) Food Bilateral.--The President shall take steps to 
     establish a bilateral committee with the People's Republic of 
     China in order to begin a dialogue relating to--
       (1) common interests in the People's Republic of China's 
     securing a stable and adequate supply of food, and

[[Page S10897]]

       (2) the interests of the United States as a supplier of 
     food to the People's Republic of China.

     SEC. 205. MULTILATERAL STRATEGIC RELATIONS.

       The President shall take steps to establish a multilateral 
     risk reduction protocol with the People's Republic of China 
     and other governments in East Asia. The protocol shall 
     provide policies and procedures that include--
       (1) establishing a line of direct communication between 
     Washington and the People's Republic of China; and
       (2) developing a protocol for naval encounters in 
     international waters.

     SEC. 206. ENFORCEMENT OF THE IRAN-IRAQ NON-PROLIFERATION ACT.

       It is the sense of the Senate that the security and 
     stability of the Near East is threatened by any augmentation 
     of weapons inventories by Iran and Iraq and the President 
     should vigilantly enforce the provisions of the Iran-Iraq 
     Arms Non-Proliferation Act of 1992.
                        TITLE III--HUMAN RIGHTS
                     Subtitle A--General Provisions

     SEC. 301. CONGRESSIONAL FINDINGS.

       Congress makes the following findings:
       (1) Congress concurs in the following conclusions of the 
     Department of State regarding human rights in the People's 
     Republic of China:
       (A) The Government of the People's Republic of China has 
     ``continued to commit widespread and well documented human 
     rights abuses, in violation of internationally accepted 
     norms, stemming from the authorities intolerance of dissent, 
     fear of unrest, and the absence and inadequacy of laws 
     protecting basic freedoms.''
       (B) Nonapproved religious groups, including Protestant and 
     Catholic groups, experienced intensified repression.
       (C) Overall in 1996, the authorities stepped up efforts to 
     cut off expressions of protest or criticism. No dissidents 
     were known to be active at year's end.
       (2) Despite public assurances by the People's Republic of 
     China that it would abide by the principles of the Universal 
     Declaration of Human Rights and despite the United Nations 
     charter requirements that all members promote respect for and 
     observe basic human rights, the Government of the People's 
     Republic of China continues to place severe restrictions on 
     religious expression and practice.

     SEC. 302. STATEMENT OF POLICY.

       It is the policy of the United States--
       (1) to encourage the People's Republic of China to adhere 
     to internationally accepted norms for the rule of law, human 
     rights, and worker rights; and
       (2) to develop a consistent multilateral response to the 
     record of the People's Republic of China on human rights and 
     worker rights.

     SEC. 303. RADIO FREE ASIA; NATIONAL ENDOWMENT FOR DEMOCRACY.

       (a) Radio Free Asia.--The President shall direct the 
     Director of the United States Information Agency and the 
     Board of Broadcasting Governors to increase the broadcast 
     hours of the Voice of America and Radio Free Asia to the 
     People's Republic of China and to broadcast to the People's 
     Republic of China in multiple Chinese dialects.
       (b) National Endowment for Democracy.--In addition to such 
     sums as are otherwise authorized to be appropriated for 
     fiscal year 1998 for grants to the National Endowment for 
     Democracy, there is authorized to be appropriated for fiscal 
     year 1998, $1,000,000 for grants to the National Endowment 
     for Democracy which shall be available only for purposes of 
     programs relating to the People's Republic of China.

     SEC. 304. MULTILATERAL HUMAN RIGHTS.

       In the absence of significant progress in improving human 
     rights in the People's Republic of China, the President shall 
     direct the United States Permanent Representative to the 
     United Nations to develop and implement a strategy to ensure 
     that there is a debate and discussion every year on the human 
     rights record of the People's Republic of China before the 
     United Nations Commission on Human Rights.
                 Subtitle B--Human Relations Commission

     SEC. 311. HUMAN RELATIONS COMMISSION.

       (a)  In General.--Not later than 6 months after the date of 
     enactment of this Act, the President, in consultation with 
     the majority and minority leaders of the Senate, the Speaker 
     of the House of Representatives, and the minority leader of 
     the House of Representatives, and appropriate representatives 
     from the private sector, shall appoint a 12-member Human 
     Relations Commission (referred to in this subtitle as the 
     ``Commission'').
       (b) Membership.--
       (1) Composition.--The Commission shall be composed of--
       (A) 4 individuals appointed from the executive branch of 
     the government;
       (B) 4 individuals appointed from the legislative branch of 
     the government; and
       (C) 4 individuals from the private sector.
       (c) Chairperson.--The Commission shall select a Chairperson 
     from among its members.
       (d) Term of Office.--Members shall be appointed for the 
     life of the Commission.
       (e) Vacancies.--Any vacancy occurring in the membership of 
     the Commission shall be filled in the same manner as the 
     original appointment for the position being vacated. The 
     vacancy shall not affect the power of the remaining members 
     to execute the duties of the Commission.
       (f) Compensation and Expenses.--
       (1) Compensation.--Each member of the Commission who is not 
     an employee of the Federal Government shall receive 
     compensation at the daily equivalent of the rate specified 
     for level V of the Executive Schedule under section 5316 of 
     title 5, United States Code, for each day the member is 
     engaged in the performance of duties for the Commission, 
     including attendance at meetings and conferences of the 
     Commission, and travel to conduct the duties of the 
     Commission.
       (2) Travel expenses.--Each member of the Commission shall 
     receive travel expenses, including per diem in lieu of 
     subsistence, at rates authorized for employees of agencies 
     under subchapter I of chapter 57 of title 5, United States 
     Code, for each day the member is engaged in the performance 
     of duties away from the home or regular place of business of 
     the member.

     SEC. 312. FUNCTIONS OF THE COMMISSION.

       (a) In General.--The Commission shall perform the following 
     functions:
       (1) Assess the status of human rights and worker rights in 
     the People's Republic of China based on the Universal 
     Declaration of Human Rights and internationally recognized 
     worker rights as defined in section 507(4) of the Trade Act 
     of 1974.
       (2) Work to develop a bilateral commission between the 
     United States and the People's Republic of China on human 
     rights and worker rights.
       (3) Expand opportunities for the exchange between the 
     United States and the People's Republic of China of judges, 
     attorneys, religious leaders, customs officials, and members 
     and staff of the executive and legislative branches of 
     government.
       (4) Encourage overseas development assistance programs that 
     support the establishment of rule of law and civil society in 
     the People's Republic of China.
       (5) Identify opportunities for multilateral action on human 
     rights and worker rights, and rejuvenate initiatives in the 
     International Labor Organization relating to human rights and 
     worker rights.
       (b) Assessment of Human Rights and Worker Rights.--
       (1) In general.--In assessing the status of human rights 
     and worker rights required by subsection (a), the Commission 
     shall establish a Prisoner Information Registry that contains 
     the information described in paragraph (2) with respect to 
     people detained in the People's Republic of China as 
     political prisoners, religious prisoners, and prisoners of 
     conscience.
       (2) Registry information.--The Prisoner Information 
     Registry shall contain the following information with respect 
     to the prisoners described in paragraph (1):
       (A) The charges against each prisoner.
       (B) A description of the judicial process or administrative 
     action taken with respect to each prisoner.
       (C) The length of incarceration, incidents of torture, and 
     use of forced labor with respect to each prisoner.
       (D) The physical condition and general health of each 
     prisoner.
       (E) Any other information relating to the general condition 
     of each prisoner that the Commission considers to be 
     relevant.
       (3) Report and recommendations.--
       (A) In general.--Not later than 1 year after the first 
     meeting of the Commission, and annually thereafter, the 
     Commission shall report to Congress and the President the 
     results of the assessment conducted under this subsection.
       (B) Recommendation.--If the Commission determines that the 
     People's Republic of China is not making progress in 
     improving the status of human rights and worker rights within 
     2 years after the date of the first meeting of the 
     Commission, the Commission shall recommend to the President 
     that the President strengthen United States policies intended 
     to improve the status of human rights and worker rights with 
     respect to the People's Republic of China as the Commission 
     determines to be appropriate.

     SEC. 313. STAFF.

       (a) Detail of Federal Employees.--On the request of the 
     Chairperson of the Commission, the head of any Federal agency 
     shall detail, without reimbursement, any of the personnel of 
     the agency to the Commission to assist the Commission in 
     carrying out its duties. Any detail shall not interrupt or 
     otherwise affect the civil service status or privileges of 
     the Federal employee.
       (b) Technical Assistance.--On the request of the 
     Chairperson of the Commission, the head of a Federal agency 
     shall provide such technical assistance to the Commission as 
     the Commission determines to be necessary to carry out its 
     duties.

     SEC. 314. TERMINATION.

       The Commission shall terminate on the day that is 3 years 
     after the date of the Commission's first meeting.

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