[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.

[[Page H10036]]

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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