[Congressional Record Volume 153, Number 129 (Tuesday, September 4, 2007)]
[House]
[Pages H10032-H10036]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CALLING ON THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA TO REMOVE
BARRIERS TO UNITED STATES FINANCIAL SERVICES FIRMS DOING BUSINESS IN
CHINA
Mr. MARSHALL. Mr. Speaker, I move to suspend the rules and agree to
the resolution (H. Res. 552) calling on the Government of the People's
Republic of China to remove barriers to United States financial
services firms doing business in China.
The Clerk read the title of the resolution.
The text of the resolution is as follows:
H. Res. 552
Whereas well-functioning financial markets in China capable
of accurately pricing risk, valuing assets, allocating
capital to its most efficient use, providing financial
products that allow savers to obtain a market rate of return,
and capable of intermediating efficiently between savers and
borrowers are essential if China is to move successfully to a
market-based economy;
Whereas the lack of diversification and innovation among
Chinese financial firms, particularly state-owned banks,
limits the financial assets in which the Chinese people can
invest and limits their access to savings and investment
vehicles that would allow them to save safely and adequately
for retirement and insure themselves against risks to health
and incomes;
Whereas the current lack of well-functioning financial
markets in China has the effect of misallocating capital and
distorting investment in ways that subsidize capital
intensive industries in China's manufacturing sector and
distort trade with the United States and other trading
partners as a consequence;
Whereas an increased presence of United States and other
foreign financial services firms in China would provide
substantial benefit to China by aiding in the reform and
development of the banking, insurance, asset management, and
securities industries and providing new products to Chinese
consumers that would contribute substantially to their
financial security;
Whereas the United States trade deficit with China in 2006
was $233,000,000,000, and this trade deficit has nearly
tripled in size since China joined the World Trade
Organization in 2001;
Whereas the United States financial services sector is a
leading source of United States exports globally and has the
potential to be a major exporter to China;
Whereas the United States maintains open and
nondiscriminatory standards for trade in financial services,
while China continues to protect large segments of its
financial services markets from foreign trade;
Whereas China's World Trade Organization commitments fail
to achieve an open and nondiscriminatory environment for
foreign financial services firms seeking to trade with China;
Whereas China is one of the few remaining major emerging
market countries that maintains limitations on foreign
ownership of financial services firms;
Whereas foreign ownership restrictions severely limit
United States firms' ability to operate in China across the
financial services sector, such that United States and other
foreign firms are not permitted to own more than a 49 percent
stake in a Chinese asset management firm, a 20 percent stake
in a Chinese bank, a 33 percent stake in a Chinese securities
firm, a 24.9 percent stake in a Chinese insurance company,
and a 50 percent stake in a life insurance joint venture;
Whereas foreign entities are not permitted to invest in
Chinese A-share securities markets except through an onerous
licensing and quota system for ``qualified foreign
institutional investors,'' and Chinese institutional
investors are also restricted in investing in foreign
securities markets except through a licensing and quota
system for ``qualified domestic institutional investors'';
Whereas the government of China has failed to meet its
World Trade Organization commitment on licensing of foreign
broker-dealers and maintains discriminatory restrictions on
the scope of business of foreign securities firms;
Whereas the government of China maintains discriminatory
standards for foreign banks in terms of capital requirements,
restrictions on corporate operational form, and restrictions
on bank branches, and has been slow to act on foreign banks'
applications;
Whereas the government of China has approved no new
enterprise annuities licenses for United States or other
foreign firms since 2005 and maintains a cumbersome multi-
agency process for approval of licenses;
Whereas the government of China maintains discriminatory
practices for branch applications from foreign-invested life
insurers, granting branch approvals slowly and consecutively,
while domestic insurers receive concurrent approvals to open
multiple branches;
Whereas major Chinese financial institutions have sought
licenses to operate in the United States on the grounds that
Chinese financial regulators satisfy consolidated supervision
standards, at the same time the Chinese government restricts
access to United States and other foreign firms on grounds
that suggest that Chinese regulators may not satisfy these
standards; and
Whereas the Secretary of the Treasury has initiated the
Strategic Economic Dialogue as a forum in which to engage
Chinese officials on economic reform issues, including
financial market issues: Now, therefore, be it
Resolved, That it is the sense of the House of
Representatives that--
(1) the Government of the People's Republic of China should
immediately implement all of its World Trade Organization
commitments to date in financial services;
(2) the Government of the People's Republic of China should
immediately implement all of its commitments to date made
under the auspices of the Strategic Economic Dialogue
initiated by the Secretary of the Treasury;
(3) the goals of the United States for the next meeting of
the Strategic Economic Dialogue should be to achieve Chinese
commitments toward--
(A) removal of all foreign investment ownership caps on
banking, life insurance, asset management, and securities;
(B) nondiscriminatory treatment of United States financial
services firms (including banking, insurer, insurance
intermediary, asset management, and securities firms) with
regard to licensing, corporate form, and permitted products
and services; and
(C) nondiscriminatory treatment of United States financial
services firms with regard to regulation and supervision; and
(4) United States financial service regulators, in
assessing whether applications from Chinese financial
institutions meet comprehensive consolidated supervision
standards, should consider whether the applications are for
operations and activities in the United States that are
currently prohibited for United States financial institutions
in China, and the extent to which such prohibitions reflect
problems with the quality of home country supervision.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Georgia (Mr. Marshall) and the gentleman from Illinois (Mr. Roskam)
each will control 20 minutes.
The Chair recognizes the gentleman from Georgia.
General Leave
Mr. MARSHALL. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks on this legislation and to insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Georgia?
There was no objection.
Mr. MARSHALL. Mr. Speaker, I would ask to insert into the Record
three letters that we have received in support of this legislation.
One letter comes from Engage China dated September 4, 2007. Engage
China is a consortium which includes these organizations: The American
Banker's Association, the American Council of Life Insurers, American
Insurance Association, The Council of Insurance Agents and Brokers,
Bankers Association for Finance and Trade, Financial Services Forum,
Financial Services Roundtable, Investment Company Institutes,
Securities Industry and Financial Markets Association.
The second letter, also dated September 4, comes from The Financial
Services Forum; and the third letter, dated August 31, comes from The
Investment Company Institute.
September 4, 2007.
Hon. Barney Frank,
Rayburn House Office Building,
Washington, DC.
Hon. Spencer Bachus,
Rayburn House Office Building,
Washington, DC.
Hon. Jim Marshall,
Cannon House Office Building,
Washington, DC.
Hon. Peter Roskam,
Cannon House Office Building,
Washington, DC.
Dear Chairman Frank, Ranking Member Bachus, Congressman
Marshall, and Congressman Roskam: As Chairman of the Engage
China coalition, I write to applaud the focus on the critical
importance of expanded access to China's financial sector in
H. Res. 552. As members of the House Financial Services
Committee, your leadership on this crucial issue is greatly
appreciated.
Engage China is a coalition of eight financial services
trade associations united in our
[[Page H10033]]
view that active engagement with China remains the most
constructive means of ensuring that our two nations mutually
benefit from our growing economic relationship, and that
common challenges are effectively addressed.
The coalition is strongly of the view that a more open,
competitive, and effective financial sector in China is a
prerequisite to successfully addressing issues that have
complicated the U.S.-China economic relationship--
particularly currency reform and the trade imbalance. For
example, access to sophisticated derivative products and
hedging techniques will help Chinese banks, securities firms,
and other businesses avoid the risks of a more volatile,
market-determined currency. Similarly, financial products and
services such as mortgages, credit cards, personal loans,
pensions, and retirement savings and insurance products--to
which most Chinese currently do not have access--would
dramatically reduce the need for excessive savings and
facilitate greater consumption.
The fastest way for China to develop the modern financial
system it needs is to import it--that is, by opening its
financial sector to greater participation by foreign
financial services firms. By providing the products and
services that China's citizens and businesses need to save,
invest, insure against risk, raise standards of living, and
consume at higher levels, foreign financial institutions
(including U.S. providers) would help create what every U.S.
manufacturer and services provider wants--a China that is
less dependent on exports, more consumption-driven and,
therefore, an enormously important and expanding market for
American products and services.
Thank you for your work on this important issue. We very
much appreciate your interest in opening China's financial
sector to greater participation by U.S. financial services
firms. We look forward to working with the Committee and the
rest of the Congress to ensure expanded financial market
access in China and other emerging markets.
Sincerely,
Rob Nichols,
President and COO, Financial Services Forum, Chairman,
Engage China Coalition.
____
September 4, 2007.
Hon. Barney Frank,
Rayburn House Office Building,
Washington, DC.
Hon. Jim Marshall,
Cannon House Office Building,
Washington, DC.
Hon. Spencer Bachus,
Rayburn House Office Building,
Washington, DC.
Hon. Peter Roskam,
Cannon House Office Building,
Washington, DC.
Dear Chairman Frank, Ranking Member Bachus, Congressman
Marshall, and Congressman Roskam: We are writing to applaud
the focus you have given to market access in House Resolution
552. We commend your bipartisan effort to introduce a
resolution that recognizes the importance of further access
for U.S. financial services firms to China's markets.
The Forum is encouraged by your interest in the U.S.-China
Strategic Economic Dialogue and additional efforts to remove
market access barriers for U.S. financial services firms.
A more open, modern, and effective financial sector in
China is a prerequisite to successfully addressing issues
that have complicated the U.S.-China economic relationship
such as currency reform and the trade imbalance.
The fastest way for China to develop the modern financial
system it needs to achieve more sustainable economic growth,
allow for a more flexible currency, and increase consumer
consumption--thereby opening new markets for U.S. products
and services--is to import it by opening its financial sector
to greater participation by foreign financial services firms.
We look forward to working with all of Congress in
continuing to draw focus and attention to this key issue for
economic reform and financial modernization in China and
other emerging markets. We thank you again for your important
focus on opening markets in China to foreign financial
services participation.
Sincerely,
Rob Nichols,
President and COO,
The Financial Services Forum.
____
Investment Company Institute,
Washington, DC, August 31, 2007.
Re H. Res. 552, ``Calling on the Government of the People's
Republic of China to remove barriers to United States
financial services firms doing business in China''.
Hon. Barney Frank,
Chairman, Committee on Financial Services, House of
Representatives, Washington, DC.
Hon. Jim Marshall,
Member, Committee on Financial Services, House of
Representatives, Washington, DC.
Hon. Spencer Bachus,
Ranking Member, Committee on Financial Services, House of
Representatives, Washington, DC.
Hon. Peter Roskam,
Member, Committee on Financial Services, House of
Representatives, Washington, DC.
Dear Chairman Frank, Ranking Member Bachus, Congressman
Marshall and Congressman Roskam: I am writing to express the
support of the Investment Company Institute (ICI) for House
Resolution 552 (H. Res. 552), ``Calling on the Government of
the People's Republic of China to remove barriers to United
States financial services firms doing business in China.''
The Institute supports your efforts to recognize the
importance of access for U.S. financial services firms,
including the U.S. mutual fund industry, to the Chinese
market.
Reform of China's financial markets is important to our
members for investment purposes as well as for the provision
of asset management services. Specifically, we appreciate the
inclusion of provisions in H. Res. 552 addressing measures
that unnecessarily limit the manner in which U.S. asset
managers can conduct their business in China. These
provisions include language calling on the Chinese government
to remove all foreign ownership caps on asset management
firms and highlighting the limitations on foreign investment
in Chinese A-share securities and on Chinese investments in
foreign securities markets. We also appreciate inclusion of
language in the Resolution calling on the Chinese government
to fulfill its WTO and Strategic Economic Dialogue
commitments relating to financial services.
The continued reform and opening of China's financial
services sector is in the economic and political interest of
both China and the United States. Fair and competitive access
to China's markets, including financial services, has
implications for U.S. economic growth and job creation. For
China, a vibrant and competitive financial system is
essential to a strong and productive economy and will be
essential in helping China address its retirement challenges.
We believe the U.S. mutual fund industry is uniquely
positioned to assist in the development of a strong financial
services market in China.
Thank you for considering the views of ICI on H. Res. 552.
Please feel free to contact me directly or Don Auerbach of
the ICI staff if you have any questions with regard to this
or any other matter.
With very best regards.
Sincerely,
Paul Stevens,
President.
Mr. Speaker, I yield myself such time as I may consume.
This resolution, in essence, simply asks China to comply with
agreements that it has already entered into. These agreements, its
compliance with these agreements, would greatly benefit our financial
services industry and we think, frankly, also benefit China.
That's for China to decide, where this resolution contemplates that
China will immediately implement all of its world trade organization
commitments, that it will implement all of its commitments made to date
under the auspices of the strategic economic dialogue.
For the next strategic economic dialogue, our goals as a country
should be the removal of all foreign investment ownership caps on
banking, life insurance, asset management and securities, and the
guarantee of nondiscriminatory treatment for the United States'
financial services firms with regard to licensing, corporate forum,
permitted products and services, as well as with regard to regulation
and supervision.
Finally, this resolution contemplates that United States financial
service regulators, in assessing whether or not applications from
Chinese financial services institutions meets our requirements, do take
into account whether or not the Chinese are living up to its end of our
bargains.
{time} 1500
Mr. Speaker, why do this?
Besides the natural inclination of Americans to insist that those
that we do business with live up to their end of the deals, all
Americans know that we have a very substantial trade deficit with
China, and that China has eaten into our manufacturing sector in a very
significant way.
At the same time that China is eating into our manufacturing
strength, it is denying us access to its financial services market. If
we have access to its financial services market, essentially that
levels the playing field; and it will also reduce our trade deficit,
because it is our belief that American financial services firms will be
very successful in the Chinese business environment.
Part of the problem with our trade deficit is that the yuan is
intentionally valued in a way to permit the Chinese Government, or the
Chinese industries, to compete more effectively price-wise with our
manufacturing sector. When challenged about this practice, the Chinese
Government routinely explains that its banking industry lacks the
expertise to appropriately hedge investments using derivatives swaps,
other
[[Page H10034]]
structured instruments. And as a result, they have to be
extraordinarily careful where they set the yuan.
Our financial services sector, if permitted to assist the Chinese
Government and the Chinese economy, will eliminate that excuse.
In addition, Mr. Speaker, it's clear that giving access for our
financial services sector into the Chinese market will be beneficial to
Chinese consumers. They'll have more access to pensions, health
insurance, retirement funds, those sorts of things. But it will also
have the effect of freeing up capital.
At the moment, the Chinese Government is interested in migrating from
manufacturing as its principal source of strength for its economy
toward services. Given the nature of how that economy is set up, in
order to do that, a very liquid, dynamic, adaptable capital investment
system needs to be established which will enable individual Chinese and
small groups of Chinese to form microbusinesses in the services sector.
If we are successful in assisting the Chinese in providing this
capital, to enable it to move more toward services, that has the
advantage to our manufacturing industries that's fairly obvious and to
the world generally.
Mr. Speaker, I reserve the balance of my time.
Mr. ROSKAM. Mr. Speaker, I yield myself such time as I may consume.
Mr. Speaker, I'm pleased to rise today in strong support of House
Resolution 552, a measure calling on the government of the People's
Republic of China to remove barriers to the United States financial
service firms doing business in China. And I'm pleased to partner with
Chairman Frank, Ranking Member Bachus, and the gentleman from Georgia
(Mr. Marshall) on what I think is a really important initiative.
Some of my prepared remarks, Mr. Speaker, would be cumulative in
light of the gentleman's remarks, but let me just kind of fill in some
other aspects and highlight a couple of the points that he made.
First of all, these are all commitments that the Chinese Government
has made. This is not negotiating a new set of agreements. This is not
contemplating something that hasn't literally been agreed to before.
All we're doing in this resolution is putting the Chinese Government on
notice, A, that we're watching; and, B, that we have expectation that
they're going to do exactly what they committed themselves to do.
Secondly, you know, if you look at what the gentleman from Georgia
described, that is, the Chinese economy, there are some that suggest
that of 1.3 billion individuals, Mr. Speaker, only 1 million Chinese
individuals currently have use of credit cards in China, compared to
480 million people who have access to cell phones.
Now, if you begin to think about where this can go, right now the
Chinese economy is somewhat held back in a way, because the Chinese
consumers and the Chinese financial markets don't have these kinds of
tools, and they have a savings rate that almost takes our breath away.
About a third of the savings, you know, they're saving at about 33
percent, which, what does that mean? That means that those dollars or
that currency is not available to purchase things, particularly from
the United States, which, as the gentleman pointed out, creates a very
difficult situation in terms of our trade deficit.
I view the Chinese economy almost like a potted plant, Mr. Speaker; a
plant that, at first glance, may look to be flourishing, but over a
period of time, as that plant matures, and as it develops, it reaches a
point at which the roots need to go deeper. And I think that this is
the point in the Chinese economic growth where China's roots need to go
deeper. They need to go deeper into the ground. And our financial
services sector, Mr. Speaker, is robust and dynamic, and offers
something that I think is a great opportunity.
But the unnatural truncating, the unnatural prohibition of the
Chinese Government of prohibiting American firms to come in, I think,
ultimately has a negative impact on our economy, has a negative impact
on our growth, and certainly has a negative impact on the 700 million
people who are in China and who are still living in poverty.
And I just want to highlight an aspect of this that has an impact on
my district, because I represent a district outside of Chicago that
employs about 68,000 individuals, about 1,100 manufacturing firms, who
are really suffering and struggling based on the currency manipulation
issue that the gentleman outlined. This is a way out. This is a way to
move forward. And I think it is incumbent upon us, and I very much
appreciate the gentleman's work on this in a bipartisan way. It is
incumbent upon us to move forward and to urge and cajole and push and
give a sharp word to the Chinese Government that they need to make
these reforms and do these things to which they've previously
committed.
Mr. Speaker, I reserve the balance of my time.
Mr. MARSHALL. Mr. Chairman, to the remarks made by the gentleman from
Illinois (Mr. Roskam), I would simply add that the Chinese economy at
the moment is not very diverse. It's actually fairly fragile. It's
quite large, but it's way too dependent upon manufacturing and the
consumption of others, not its own consumers, but consumers throughout
the world. If there's a downturn elsewhere in the world, it
dramatically impacts the Chinese economy. And it is not in the interest
of the globe, frankly, to have an economy that's as large as China's
and as fragile as China's. So from our own economic perspective, it's
good to cause the Chinese market to diversify.
In addition, as it stands now in China, there is a very thin middle
class. The availability of American financial products can help expand
the size of that middle class. And it is middle classes that head
governments in good directions, that insist that governments be
responsible and responsive to the people, that head governments more
toward being democratic governments. So there's another reason that
this is a very wise move, not only for the United States, but also for
the Chinese Government.
I yield such time as he might consume to the chairman of the
committee, who does a great job as our chairman, the gentleman from
Massachusetts (Mr. Frank).
Mr. FRANK of Massachusetts. Mr. Speaker, I appreciate the very
important work the gentleman from Georgia (Mr. Marshall) is doing on
this, and the bipartisan cooperation we have.
It is really disappointing that we have to bring this resolution
forward. It does not speak well of the government of the People's
Republic of China that this is necessary, because they are trying to
have it both ways in an inappropriate manner.
On the one hand, China insists on being treated with the respect due
a great world power. And they are proud of their economic strength, and
they say to America, in fact, they try to have it both ways in two
ways. Maybe they're trying to have it four ways, because what they tell
us is, open up, economic competition is the way. If we are selling more
goods in your country than you are selling in ours, that's because
we're doing a better job of it. And so they want respect as a world
power, and they want an openness in the economy, but only in one way,
because when it comes to areas of economic activity where they don't
have that overwhelming advantage, where, frankly, cheap labor doesn't
buy you a lot, where our technology and our level of sophistication
works to our advantage, all the arguments they've used go out the
window. Now they're no longer this great world power. They're a poor
country that has to shelter its banking activity from the United States
and others. They don't single us out. They shut out much of the world.
The argument that you should open up your economy and let economic
forces play out, without imposing political barriers, that apparently
works with manufacturing of their goods, but that's exactly the
argument they repudiate when we talk about our financial institutions.
I would add that there is, of course, another example of this with
regard to the intellectual property failings in China, but we're here
to focus on the financial services. And so what we are saying to the
Government of China is, essentially, I guess I would say this, they may
be credited with one of the great engineering feats in history, even
more impressive than the Great Wall of China, is turning the Pacific
Ocean
[[Page H10035]]
into a one-way street, because when it comes to allowing the forces of
economic competition to determine outcomes, where they would have an
advantage, they're all for it. But where we say, look, we have these
very important financial institutions, as my two colleagues have
mentioned, institutions which will benefit the Chinese, which will help
with the savings rate.
The gentleman from Georgia has made it clear. This isn't an assault
on China by the outsiders. This is something that would be of interest
to the Chinese because the Chinese use the same argument to us. They
say, look what we're doing for you. We're giving you these cheaper
products. Don't turn them down.
Well, I don't understand why that doesn't translate into their doing
the same thing.
And so you cannot, I think, in this world consistently, at the same
time, be a complete free trader where you have an advantage, but a
mercantilist and protectionist and restrictionist society where you
think somebody else might have the advantage.
But this resolution is aimed only partly at China. It is also a
directive from this House. And I hope, with a very large vote, and I
hope our colleagues in the Senate will do it, to the United States
regulators, to the Securities Exchange Commission, to the bank
regulators, to the Federal Reserve, the Secretary of the Treasury: do
unto others as they do unto us in the financial area. Do not allow the
Chinese financial institutions a freedom to operate in the United
States that they would deny to us. And I want to stress that.
There have been criticisms that have come from China and from some in
the United States who say, yes, China sells a lot, but don't be
restrictive. The answer is openness.
Well, this is the test. Is openness a two-way ocean?
And if the Chinese continue to resist living by the doctrine they
preach to us, then the United States regulators, those in the United
States who decide whether Chinese institutions can have access here,
really, in their own interest, should take account of that because if
you continue to have a situation in which Chinese financial
institutions are allowed activity in the U.S. that the Chinese
Government denies to American institutions in China, I believe this
body will go beyond a resolution. And I can tell you that the committee
that I chair will begin to consider, then, legislative changes. And
we're often told that you can't legislate that because of the WTO. But
here we're asking them to live up to their WTO responsibilities. And if
this continues, I will consult with our colleagues in the Ways and
Means Committee, and I think we will try to put some binding
legislation here. I hope it doesn't come to that.
And I thank the gentleman from Georgia (Mr. Marshall) for taking the
initiative here and the gentleman from Illinois (Mr. Roskam) and
others. This is, I hope, unanimous, but certainly overwhelming, it was
unanimous in the Committee on Financial Services' request.
And the gentleman from Georgia read a very impressive list. Every
important entity of financial institutions in the United States was on
the letters that the gentleman from Georgia read.
So we hope that the Chinese Government will listen. And if they
don't, we hope the United States regulators will listen, because we are
only asking here that the Chinese live by the doctrines that they
profess to believe in. And we believe that this is something that is in
the mutual interest of both countries.
I submit the following exchange of correspondence regarding H. Res.
552.
Hon. Barney Frank,
Chairman, Committee on Financial Services,
Washington, DC.
Dear Mr. Chairman: I am writing to you concerning the bill,
H. Res. 552, calling on the Government of the People's
Republic of China to remove barriers to United States
financial services firms doing business in China. I
understand there are certain provisions of this legislation
as it will be presented to the full House that fall within
the Rule X jurisdiction of the Committee on Foreign Affairs.
In the interest of permitting your Committee to proceed
expeditiously to floor consideration of this important
legislation, I am willing to waive this Committee's right to
sequential referral. I do so with the understanding that by
waiving consideration of the bill, the Committee on Foreign
Affairs does not waive any future jurisdictional claim over
the subject matters contained in the legislation which fall
within its Rule X jurisdiction.
I would ask that you place this letter into the
Congressional Record when the House has H. Res. 552 under
consideration.
Sincerely,
Tom Lantos,
Chairman.
____
House of Representatives,
Committee on Financial Services,
Washington, DC, September 4, 2007.
Hon. Tom Lantos,
Chairman, Committee on Foreign Affairs,
Washington, DC.
Dear Mr. Chairman: Thank you for your letter concerning
House Resolution 552, calling on the Government of the
People's Republic of China to remove barriers to United
States financial services firms doing business in China. This
resolution was introduced on July 17, 2007, and was referred
to the Committee on Financial Services. It is my expectation
that this legislation will be scheduled for floor
consideration shortly.
I recognize that certain provisions in the resolution fall
within the jurisdiction of the Committee on Foreign Affairs
under Rule X of the Rules of the House of Representatives.
However, I appreciate your willingness to forego action on
House Resolution 552 in order to allow the resolution to come
to the floor expeditiously. I agree that your decision will
not prejudice the Committee on Foreign Affairs with respect
to its jurisdictional prerogatives on this or similar
legislation.
I will include this exchange of correspondence in the
Congressional Record when this resolution is considered by
the House. Thank you again for your cooperation in this
important matter.
Barney Frank,
Chairman.
Mr. ROSKAM. Mr. Speaker, I don't have any additional speakers. Let me
just yield myself another minute or two just to say this in closing.
We have before us, really, two competing economic systems that are
playing out essentially. We have our system, which has a very high view
of the individual, free people making free decisions within a free
market. That is the great strength of the American system. We show
great deference and great respect to the free market on balance.
China, however, is in some sort of transition right now, where
they've not had that high view of the individual. They've not had that
high view of the free market, and they're beginning this process of
more or less dabbling in it. This is the call for them to stop the
dabbling, as it relates to the financial services sector, and to fully
embrace those things, those concepts that they propound around the
world.
{time} 1515
Mr. Speaker, I reserve the balance of my time.
Mr. MARSHALL. Mr. Speaker, I yield 30 seconds to Chairman Frank of
Massachusetts.
Mr. FRANK of Massachusetts. Mr. Speaker, I misspoke. I said that this
has passed our committee unanimously. I was reminded by our very able
staff that the committee sentiment was so overwhelming that we
unanimously decided we didn't even have to take it up in committee. So
this did not pass the committee unanimously; this bypassed the
committee unanimously.
Mr. MARSHALL. Mr. Speaker, I yield myself such time as I may consume.
I want to just take this opportunity to make an observation. This is
absolutely the right thing to do. A deal is a deal. It is not a one-way
street. We give accommodations; they agree to accommodations in
exchange. They have got to live up to the accommodations that they
have, in fact, agreed upon. If they don't, we need to take some action.
But I do want to not associate myself enthusiastically with one
aspect of the arguments in favor of this, and that is that somehow we
have got to turn the Chinese into better consumers. No question
improving consumption can lead to some of the benefits that we have
already discussed. But also adding another billion heavy consumers here
and another billion heavy consumers there may not necessarily be in our
best interest from a global perspective, and somehow we have got to
find a balance here.
It is clear there is a large swath of the Chinese populace that could
use some of the financial tools that we could make readily available to
them and, as a result, wind up moving into the middle class. It is
certainly something we should support and encourage.
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But, frankly, that the Chinese save a lot is not necessarily a terribly
bad thing. I think we all agree that Americans don't save enough and
too many Americans get into trouble as a result of the fact that they
don't save enough. Credit is not so wonderful for all, and somehow
there needs to be a balance that is reached in our effort to improve
the globe.
Mr. PAUL. Mr. Speaker, I rise in opposition to H. Res. 552, ``Calling
on the Government of the People's Republic of China to remove barriers
to United States financial services firms doing business in China.''
Attempting to force the hand of the Chinese government by requiring
them to open their markets to United States financial services firms is
akin to playing with fire. Politicians today fail to realize just how
deeply our profligate fiscal and monetary policies of the past three
decades have left us in debt to China. The Chinese government holds
over one trillion dollars in reserves, leaving the future of the dollar
highly vulnerable to the continued Chinese demand.
While I am in favor of unencumbered free trade, free trade cannot be
enforced through threats or by resorting to international protectionist
organizations such as the WTO. Even if the Chinese are recalcitrant in
opening up their markets, it is not the role of the United States
government to lecture the Chinese government on what it should or
should not do in its own economy.
H. Res. 552 is a blatant encroachment on the sovereignty of the
Chinese government. Were the Chinese government to pressure us into
allowing greater access to the United States market for Chinese
financial services firms, or to pressure us into allowing the sale of
firms in strategic sectors of the market, we would justifiably resist
this pressure.
Diplomatic efforts cannot work through blustering language and vague
retaliatory threats. It requires an awareness both of the many benefits
of trade with China and the fact that our current trade imbalances are
largely the responsibility of our trade policies. We must understand
that China is not a 98-pound weakling who can be bossed around. If we
treat other countries with respect and as equal partners, we might be
pleased to find that our requests receive a more attentive ear.
Mr. MARSHALL. Mr. Speaker, I yield back the balance of my time.
Mr. ROSKAM. Mr. Speaker, I have no further requests for time, and I
yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Georgia (Mr. Marshall) that the House suspend the rules
and agree to the resolution, H. Res. 552.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. MARSHALL. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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