[Congressional Record Volume 143, Number 145 (Friday, October 24, 1997)]
[Senate]
[Pages S11192-S11193]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  By Mr. FAIRCLOTH:
  S. 1313. A bill to establish an Office of National Security within 
the Securities and Exchange Commission, provide for the monitoring of 
the extent of foreign involvment in U.S. securities markets, financial 
institutions, and pension funds, and for other purposes; to the 
Committee on Banking, Housing, and Urban Affairs.


                  THE U.S. MARKET SECURITY ACT OF 1997

  Mr. FAIRCLOTH. Mr. President, on October 28 the President of the 
People's Republic of China will begin an official state visit to this 
country. Jiang Zemin is coming. It is reported, as a gift to him, the 
Clinton administration will applaud China's policy on weapons 
proliferation.
  As a reward for China's responsible behavior, President Clinton and 
Vice President Gore plan to willingly, without reservation, share our 
most sensitive nuclear technology with China.
  There is something very suspicious about this drastic shift in U.S. 
foreign policy. I cannot understand why the administration would 
negotiate this kind of deal?
  Hasn't the CIA told us that China serves as the weapons clearinghouse 
of the world? Why in the world would President Clinton seek to abandon 
a longstanding Federal law that has prohibited American corporations 
from selling nuclear technology to Communist China.
  It appears this is payback time.
  Senator Thompso9n and the Governmental Affairs Committee have spent 
the last few months searching for why China would funnel illegal 
contributions into American political campaigns. Perhaps the pieces of 
the puzzle are starting to come together.
  Clearly, the Chinese Government wants the best American technology 
for both military and commercial use. China wants both nuclear weapons 
and nuclear powerplants.
  Apparently, President Clinton And vice President Gore are convinced 
that the best American nuclear technology is none too good for Beijing.
  Now I understand that there are some very good American companies 
which stand to make billions from this deal. Certainly the foreign 
policy establishment is excited about all of the new lobbying and 
consulting possibilities. But aren't there some far more important 
factors to be considered?
  Let me remind the Clinton administration that its own Central 
Intelligence Agency concluded in July that the People's Republic of 
China had become the most significant supplier of nuclear and chemical 
weapons technology to foreign countries.
  Let me remind the Clinton administration that the People's Republic 
of China sold chemical weapons materials to Iran and missiles and ring 
magnets used to process uranium to Pakistan.
  Let me remind the Clinton administration that the People's Republic 
of China has a long history of misrepresenting the use of American 
technology it buys and then reselling it to other nations, often 
terrorist countries like Iran.
  Mr. President, selling nuclear technology to the Chinese is a 
terrible idea. Even worse, however, is the thought that Americans are 
paying for it too.
  Since 1989, the Peoples Republic of China and various businesses 
connected to the Chinese Government have issued nearly $7 billion in 
bonds denominated in United States dollars.
  China itself has issued some $2.7 billion in such bonds.
  The Chinese International Trading and Investment Co., Chaired by Wang 
Jung, reportedly connected to the Chinese Army, has issued $800 million 
in bonds in the United States during the past few years.
  If Mr. Jung's name sounds familiar--its because he was at the White 
House having coffee with the President on February 6, 1996. What a 
delightful man for a tea party.
  It was also discovered that Mr. Jung's other company, Poly 
Technologies, was responsible for smuggling AK-47's to Los Angeles 
gangs.
  This is the man that was at the tea party.
  The Bank of China has also issued some $80 million in dollar 
denominated bonds in the United States. This is the same bank that 
wired money to Charlie Trie on a regular basis.
  Mr. President, my greatest concern is that American mutual funds and 
pension funds will end up owning these bonds. Where else is there for 
them to go except to mutual funds and pension funds? To say that these 
bonds are risky is putting a nice face on them. If these companies 
default, they will stick the American taxpayer with the bill on the 
Chinese bonds.
  Today, I am introducing legislation that will require the SEC to 
establish an office of national security that will routinely report to 
the Congress on security offerings by foreign governments and 
companies. This will also require the Pension Benefit Guaranty 
Corporation to annually review America's pension funds and report on 
the number of foreign securities being held.
  It is time that Congress and the American public start paying 
attention to this quiet financial invasion. We need to pay attention to 
what is in America's retirement funds because we know who will pick up 
the deficit.
  Already, it has been reported that the Arkansas State Teachers' 
Retirement Fund is holding roughly 40 percent of its assets in Pacific 
rim entities, several of which are Chinese.
  If so, this is a tragedy for people who worked all their lives and 
are counting on that pension for their retirement peace of mind, when 
in reality it might not happen.
  Mr. President, maybe this administration thinks the American people 
don't care about China's activities. Maybe I'm wrong, but I believe the 
American people do care. They know the Chinese people are oppressed by 
a

[[Page S11193]]

Communist government that uses capitalism when it is convenient to 
further their death grip on political power.
  They know that China engages in unfair trading practices which result 
in a $50 billion trade deficit with the American people on an annual 
basis. They know that China oppresses their people and flagrantly 
violates human rights. They know China uses slave labor to make 
products for sale. They know that China sells the internal organs of 
executed prisoners on the black market. They know China infringes 
patents by selling pirated copies of American products. They know the 
People's Liberation Army is buying businesses in the United States as 
fronts for their secretive dealings. They know China persecutes 
Christians and religious believers.
  I say to President Clinton and Vice President Gore that the American 
people do care. And remember that while the People's Republic of China 
may have supported their reelection campaigns, they do not support the 
freedom campaign of their own people.
  Selling highly sensitive nuclear technology to China is a bad idea 
with extremely dangerous consequences. Permitting the invasion of our 
capital markets is another bad idea with worse potential consequences.
  I also believe that allowing China to own ports on both ends of the 
Panama Canal is another bad idea, from whence they could dominate the 
canal and will bring dangerous consequences to our national security.
  The Clinton administration and this Congress will face a difficult 
decision between two very strong competing forces--money and morality. 
I hope they decide to do what is in the best interests of the American 
people, not their foreign campaign donors that have all fled the 
country.
                                 ______