[Congressional Record Volume 170, Number 139 (Monday, September 9, 2024)]
[House]
[Pages H5041-H5042]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              CHINESE CURRENCY ACCOUNTABILITY ACT OF 2023

  Mrs. KIM of California. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 510) to require the United States Governor of, and 
the United States Executive Director at, the International Monetary 
Fund to oppose an increase in the weight of the Chinese renminbi in the 
Special Drawing Rights basket of the Fund, and for other purposes, as 
amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                                H.R. 510

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Chinese Currency 
     Accountability Act of 2023''.

     SEC. 2. OPPOSITION OF THE UNITED STATES TO AN INCREASE IN THE 
                   WEIGHT OF THE CHINESE RENMINBI IN THE SPECIAL 
                   DRAWING RIGHTS BASKET OF THE INTERNATIONAL 
                   MONETARY FUND.

       The Secretary of the Treasury shall instruct the United 
     States Governor of, and the United States Executive Director 
     at, the International Monetary Fund to use the voice and vote 
     of the United States to oppose any increase in the weight of 
     the Chinese renminbi in the basket of currencies used to 
     determine the value of Special Drawing Rights, unless the 
     Secretary of the Treasury has submitted to the Committee on 
     Financial Services of the House of Representatives and the 
     Committee on Banking, Housing, and Urban Affairs of the 
     Senate a written report which includes a certification that--
       (1) the People's Republic of China is in compliance with 
     all its obligations under Article VIII of the Articles of 
     Agreement of the Fund;
       (2) in the preceding 12 months, there has not been a report 
     submitted under section 3005 of the Omnibus Trade and 
     Competitiveness Act of 1988 or section 701 of the Trade 
     Facilitation and Trade Enforcement Act of 2015 in which the 
     People's Republic of China has been found to have manipulated 
     its currency; and
       (3) the People's Republic of China adheres to the rules and 
     principles of the Paris Club and the OECD Arrangement on 
     Officially Supported Export Credits.

     SEC. 3. SUNSET.

       Section 2 shall have no force or effect beginning 10 years 
     after the date of the enactment of this Act.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
California (Mrs. Kim) and the gentleman from California (Mr. Sherman) 
each will control 20 minutes.
  The Chair recognizes the gentlewoman from California.


                             General Leave

  Mrs. KIM of California. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days in which to revise and extend their 
remarks and include extraneous material on this bill.
  The SPEAKER pro tempore (Mr. Rulli). Is there objection to the 
request of the gentlewoman from California?
  There was no objection.
  Mrs. KIM of California. Mr. Speaker, I yield myself such time as I 
may consume.
  Mr. Speaker, today, I rise in support of the Chinese Currency 
Accountability Act sponsored by the gentleman from Ohio (Mr. Davidson).
  In 2016, the International Monetary Fund included the Chinese 
renminbi, RMB, in the currency basket that determines the value and 
interest rate for Special Drawing Rights, known as SDRs. SDRs are both 
reserve assets and an accounting unit for the IMF, so they play a 
central role in the Fund's lending throughout the world.
  It was premature for the Fund to let the RMB influence the SDR, whose 
value had previously been determined only by the dollar, euro, yen, and 
pound.
  The PRC has failed to make the serious reforms that would justify 
labeling the RMB a major currency. In addition, the People's Bank of 
China was and remains a tool of the Chinese Communist Party, not an 
independent central bank.
  The Treasury Department knows this all too well. Every year, it 
reports to Congress that China's currency management is so opaque that 
it is difficult for the outside world to even understand Beijing's 
policy toward the RMB.
  In addition, Beijing's lending policies abroad, including through the 
Belt and Road Initiative, have saddled developing countries with so 
much debt that the IMF faces difficulties designing rescue programs.
  It is difficult to know how much debt these countries are in. The CCP 
refuses to play by the multilateral rules of the road to not only be 
transparent about the debt but to significantly restructure it. This 
has become one of the most acute threats to the mission of the Fund.
  Nevertheless, in 2022, Treasury signed off when the IMF voted to 
increase the weight of the RMB in the SDR currency basket. As a result 
of this shocking decision, the RMB has now become the third most 
important currency in the basket, behind the dollar and euro.
  This is why Mr. Davidson's bill is critical. H.R. 510 will prevent 
future increases to the RMB's weight at the IMF until China starts 
playing by the rules.
  This is a commonsense measure that was unanimously supported when the 
Financial Services Committee marked it up last year.
  I commend Mr. Davidson for his clear-eyed piece of legislation to 
hold Beijing accountable, and I urge my colleagues to support it.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SHERMAN. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I rise in support of H.R. 510, the Chinese Currency 
Accountability Act of 2023, sponsored by Representative Davidson. This 
bill is related to the International Monetary Fund's Special Drawing 
Rights, known as SDRs, and the influence of China's currency in the SDR 
program.
  SDRs are international assets created by the International Monetary 
Fund, the IMF, to supplement member countries' foreign exchange 
reserves, and they can enable member countries to reduce their reliance 
on domestic or external debt when building those reserves.
  SDRs can be converted into government-issued currency, such as the 
dollar, the yuan, or the pound, assuming that there are not sanctions 
or other

[[Page H5042]]

prohibitions that would prevent such financial transactions.

                              {time}  1430

  The value of an IMF member's SDRs is defined by a basket of 
currencies, which are a mix of five globally important currencies, 
sometimes called fiat currencies in that they are issued by governments 
or, in the case of a euro, an association of governments. Those five 
currencies that are behind the SDRs are the U.S. dollar, the euro, the 
Chinese yuan, the Japanese yen, and the British pound.
  The key thing here is that the percentage of that basket that is 
comprised of the Chinese currency was increased in 2022 and now is at 
12 percent of the total, compared to the U.S. dollar, which is at 43 
percent of the total.
  The bill would require the Treasury Secretary to oppose at the IMF 
any future percentage increase in the weight of the Chinese currency in 
that SDR currency basket. The bill would allow a waiver of such 
provision to the executive branch should the Secretary of the Treasury 
be able to certify to Congress that China meets certain standards.
  Those standards include that China is in compliance with all of its 
obligations under article VIII of the Articles of Agreement of the IMF; 
second, that there has not been certain reports submitted in the prior 
12 months indicating that China is engaging in currency manipulation; 
and, third, that China is adhering to the rules and principles of the 
Paris Club and the OECD Arrangement on officially supported export 
credits.
  Mr. Speaker, I will note that the Department of the Treasury has 
expressed some concerns about this bill, especially due to the fact 
that the Department of the Treasury does not have visibility into 
China's confidential provisions of data to the IMF and may not be able 
to independently certify that China is complying with the IMF and other 
global obligations.
  As a result, China has indicated that it may be difficult to certify 
whether China has met the standards outlined in that bill that underlie 
the possibility of a waiver of its provisions.
  These are reasonable concerns. Democrats on the Financial Services 
Committee have urged our Republican colleagues to work to improve the 
bill before it is finally enacted into law. That might include allowing 
the Department of the Treasury to rely on certifications from the IMF 
as to whether China is meeting its responsibilities looking at that 
confidential information that is provided by China to the IMF.
  In any case, this bill moves us forward. I am sure that, through the 
legislative process, there will be some improvements.
  Mr. Speaker, I urge my colleagues to support this bill, and I reserve 
the balance of my time.
  Mrs. KIM of California. Mr. Speaker, I yield such time as he may 
consume to the gentleman from Ohio (Mr. Davidson).
  Mr. DAVIDSON. Mr. Speaker, I rise in support of H.R. 510, the Chinese 
Currency Accountability Act. I was proud to introduce this measure last 
year, which the Financial Services Committee embraced with a vote of 
40-0.
  Mr. Speaker, the International Monetary Fund acts as the world's 
lender of last resort, and its Special Drawing Rights serve as a unit 
of account for its activities. SDRs are also important reserve assets 
on the balance sheet of central banks. As such, SDR holdings can earn 
interest, and SDR liabilities can incur costs.
  Prior to 2016, both the value and interest rate of the Special 
Drawing Rights was determined by major currencies issued by market 
economies and their central banks and overseen by democratic 
governments. They were the dollar, the euro, the yen, and the pound 
sterling.
  China is not a market economy, so it is astonishing that the 
International Monetary Fund, with the approval of the current Treasury 
Department, then decided to add the Chinese renminbi to its currency 
basket. On a number of measures, the renminbi was nowhere near the 
level of these other currencies, and, of course, the Chinese Central 
Bank is the furthest thing from what one would call independent or 
representative of a market economy. This is still the case today.
  Even more bewildering was the 2022 decision to increase the 
renminbi's weight, the proportion of influence it has, within the 
currency basket.
  By this time, it was not only clear that China's exchange rate 
management remains subject to the whims of the Chinese Communist Party, 
but the IMF also knew that China's predatory lending to developing 
countries was putting the viability of IMF programs in jeopardy. In 
fact, China's Belt and Road Initiative is designed to undermine the 
International Monetary Fund, so why would IMF grow the rate or 
influence of it after having already made the mistake of even including 
it?
  Currently, China's Communist Party is an economic and strategic 
rival, and hopefully it remains a rival in the market. However, China 
should not be allowed to skirt the rules at the expense of American 
taxpayers and at the expense of our market.
  It is unacceptable for the IMF to preach to the world on debt 
transparency, the rule of law, and central bank independence while it 
is rewarding the Communist Party in China for violating every single 
one of these principles.

  Our legislation says enough is enough. It requires the Treasury 
Department to oppose further increases of the renminbi for the IMF's 
currency basket until Treasury can certify that China is complying with 
the rules of the road.
  As a member of the World Trade Organization and other international 
organizations China is part of, if we follow the rules, China should be 
held to the same standards. Of course, they are not doing that. It 
would include upholding China's obligations under the IMF's Articles of 
Agreement and complying with the same lending rules that other large 
economies have committed to.
  This also means China would have to take significant steps toward 
restructuring its Belt and Road loans so that they are not actually 
working to undermine the IMF. In other words, the Chinese Currency 
Accountability Act isn't about holding China to different standards, 
but, rather, holding them to the exact same standards everyone else is 
held to.
  Mr. Speaker, I urge all of my colleagues to support this measure.
  Mr. SHERMAN. Mr. Speaker, I yield myself the balance of my time to 
close.
  Mr. Speaker, in an effort to expand both its economy and global 
influence, China has been accused of manipulating its currency. 
Concerns about this abound and have been well expressed by Mr. 
Davidson. This is especially concerning when it regards items that 
affect American interests at international institutions, such as the 
IMF.
  This bill would empower the Department of the Treasury to address 
that issue and, in fact, require them to address that issue. I think 
that it is going to be an effective tool for us to deal with China, an 
important nation that doesn't always play by the rules.
  Mr. Speaker, I urge my colleagues to support this bill, and I yield 
back the balance of my time.
  Mrs. KIM of California. Mr. Speaker, I urge my colleagues to support 
H.R. 510, and I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from California (Mrs. Kim) that the House suspend the rules 
and pass the bill, H.R. 510, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

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