[Congressional Record (Bound Edition), Volume 150 (2004), Part 9]
[Senate]
[Pages 12139-12142]
[From the U.S. Government Publishing Office, www.gpo.gov]




ANNUAL REPORT OF THE U.S.-CHINA ECONOMIC AND SECURITY REVIEW COMMISSION

  Mr. BYRD. Mr. President, today the U.S.-China Economic and Security 
Review Commission issued its second major annual report to the 
Congress, as mandated by the Congress in its enabling statute, P.L. 
106-398, October 30, 2000, as amended by Division P of P.L. 108-7 
February 20, 2003. I commend it to my colleagues as a comprehensive, 
insightful and useful examination of the key trends, policies and 
realities inherent in the U.S./China relationship, and featuring a 
number of recommendations for the Congress to consider.
  It is noteworthy that the Commission adopted this report by a 
unanimous, bipartisan vote of 11-0. The commission is composed of an 
equal number of Democratic and Republican appointees, three each by the 
four leaders of the Senate and the House of Representatives. It is 
refreshing, indeed, in an era characterized by far too much 
partisanship and divisiveness, that in its treatment of the often 
contentious and important issues regarding this growing bilateral 
relationship, the Commission could reach a unanimous vote. Debates over 
foreign policy, it has often been said, to be effective, should end at 
the water's edge, and we should speak as a Nation with one voice to the 
world. Mr. President, in this report, bipartisan unanimity has been 
achieved, and by a very diverse group of thoughtful and independent 
minded Commissioners. I would also point out that this is a purely 
congressional body, in that all of the commissioners are appointed by 
the congressional leadership, and the report which is issued is 
intended to be exclusively advisory to the Congress.
  The mandate of the U.S.-China Commission is to ``monitor, 
investigate, and report to Congress on the national security 
implications of the bilateral trade and economic relationship between 
the United States and the People's Republic of China.'' The commission, 
therefore, takes an expansive view of U.S. national security, which is 
that our economic health and well-being are fundamental national 
security matters, including the maintenance of a strong manufacturing 
base, and the ability to maintain U.S. global competitiveness and a 
healthy employment level and growth rate. These central economic 
factors are just as essential to the national security and defense of 
our Nation as are strong and ready standing armies, navies and air 
forces equipped with the best weaponry, leadership and operational 
doctrines.
  In addition, the commission has treated, very thoroughly, a series of 
specific topics mandated in amendments to its charter last year, 
including China's proliferation practices, China's economic reforms and 
U.S. economic transfers to China, China's energy needs, Chinese firms' 
access to the U.S. capital markets, U.S. investments into China, 
China's economic and security impacts in Asia, U.S.-China bilateral 
programs and agreements, China's record of compliance with its World 
Trade Organization, WTO, commitments, and the Chinese government's 
media control efforts.
  Mr. President, I will not recite all the many important conclusions 
and recommendations for action contained in this timely report. But I 
point out that the United States needs to be much more proactive and 
clear-thinking in managing our overall relationship with China, and far 
more focused on what our goals are in the relationship if we are to 
advance our national economic and security interests.
  The report concludes, overall, that the U.S.-China economic 
relationship lacks active management. U.S. goals for specific elements 
of the relationship are too vague or even nonexistent.

[[Page 12140]]

This is particularly highlighted in the enormous goods trade deficit, 
some $123 billion in 2003, and growing rapidly. The United States has 
the capability to nudge the Chinese into more positive policies and 
actions, thereby leveling a playing field which China has tilted in the 
direction of mercantilist behavior, including, in some arenas, 
intimidating tactics. Issues which have been festering in the WTO, for 
instance, such as China's artificial manipulation of the value of her 
currency, continued tolerance of high levels of Intellectual Property 
Crimes, massive illegal subsidization of Chinese enterprises, 
resistance to good faith compliance with important WTO procedures, and 
with many pledges made for progress in proliferation of WMD, all 
require heightened levels of attention and management by the United 
States
  The United States certainly has such influence at this period, and 
for the next few years, because of the enormous dependence of China on 
our good will, our consumer markets, our manufacturing capability, our 
technology and our cooperation in many fields. Such dependence will not 
last forever, however, and it is time that we begin to manage this 
relationship in ways that will produce more positive and favorable 
outcomes.
  Lastly, Mr. President, this report is studded with recommendations 
for Congressional action and for joint policy-making efforts between 
the Congress and the Executive Branch. It recognizes that good policy 
proceeds from building a strong consensus between our two branches, as 
well as between our two countries. I encourage my colleagues, many of 
whom have testified on these matters before the Commission, to examine 
the recommendations offered for our consideration.
  Mr. President, the Commission has today issued this fulsome report, 
and I ask unanimous consent to have printed in the Record the 
Commission's list of recommendations.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                      Recommendations to Congress


 Chapter 1--China's Industrial, Investment, and Exchange Rate Policies

     Recommendations for dealing with China's currency manipulation

       The 1988 Omnibus Trade and Competitiveness Act requires the 
     Treasury Department to examine whether countries are 
     manipulating their exchange rates for purposes of gaining 
     international competitive advantage. The Treasury is to 
     arrive at its finding in consultation with the IMF, which 
     defines manipulation as ``protracted large-scale intervention 
     in one direction in the exchange market.'' The Treasury has 
     repeatedly evaded reporting on this test. The Commission 
     recommends that Congress require the Treasury to explicitly 
     address this test in its required report to Congress. 
     Furthermore, a condition for taking action against a country 
     that manipulates its currency is that an offending country be 
     running a material global current account surplus in addition 
     to a bilateral surplus. The Commission recommends that 
     Congress amend this provision so that a material global 
     current account surplus is not a required condition.
       The administration should use all appropriate and available 
     tools at its disposal to address and correct the problem of 
     currency manipulation by China and other East Asian 
     countries. With regard to China, this means bringing about a 
     substantial upward revaluation of the yuan against the 
     dollar. Thereafter, the yuan should be pegged to a trade-
     weighted basket of currencies, and provisions should be 
     established to guide future adjustments if needed. As part of 
     this process, the Treasury Department should engage in 
     meaningful bilateral negotiation with the Chinese government, 
     and it should also engage in meaningful bilateral 
     negotiations with Japan, Taiwan, and South Korea regarding 
     ending their long-standing exchange rate manipulation. The 
     administration should concurrently encourage our trading 
     partners with similar interests to join in this effort. The 
     Commission recommends that Congress pursue legislative 
     measures that direct the administration to take action--
     through the WTO or otherwise--to combat China's exchange rate 
     practices in the event that no concrete progress is 
     forthcoming.

Recommendations for addressing China's mercantilist industrial and FDI 
                                policies

       The Commission recommends that Congress direct the United 
     States Trade Representative (USTR) and the Department of 
     Commerce to undertake immediately a comprehensive 
     investigation of China's system of government subsidies for 
     manufacturing, including tax incentives, preferential access 
     to credit and capital from state-owned financial 
     institutions, subsidized utilities, and investment conditions 
     requiring technology transfers. The investigation should also 
     examine discriminatory consumption credits that shift demand 
     toward Chinese goods, Chinese state-owned banks' practice of 
     noncommercial-based policy lending to state-owned and other 
     enterprises, and China's dual pricing system for coal and 
     other energy sources. USTR and Commerce should provide the 
     results of this investigation in a report to Congress that 
     assesses whether any of these practices may be actionable 
     subsidies under the WTO and lays out specific steps the U.S. 
     government can take to address these practices.
       The Commission recommends that Congress direct the 
     administration to undertake a comprehensive review and 
     reformation of the government's trade enforcement 
     infrastructure in light of the limited efforts that have been 
     directed at enforcing our trade laws. Such a review should 
     include consideration of a proposal by Senator Ernest 
     Hollings (D-SC) to establish an assistant attorney general 
     for international trade enforcement in the Department of 
     Justice to enhance our capacity to enforce our trade laws. 
     Moreover, the U.S. government needs to place an emphasis on 
     enforcement of international labor standards and appropriate 
     environmental standards.
       The Commission recommends that Congress direct the 
     administration to work with other interested WTO members to 
     convene an emergency session of the WTO governing body to 
     extend the MFA at least through 2008 to provide additional 
     time for impacted industries to adjust to surges in imports 
     from China.


     Chapter 2--China in the World Trade Organization: Compliance, 
                      Monitoring, and Enforcement

       The Commission recommends that Congress press the 
     administration to make more use of the WTO dispute settlement 
     mechanism and/or U.S. trade laws to redress unfair Chinese 
     trade practices. In particular, the administration should act 
     promptly to address China's exchange rate manipulation, 
     denial of trading and distribution rights, lack of IPR 
     protection, objectionable labor standards, and subsidies to 
     export industries. In pursuing these cases, Congress should 
     encourage USTR to consult with trading partners who have 
     mutual interests at the outset of each new trade dispute with 
     China.
       The Commission recommends that Congress press the 
     administration to make better use of the China-specific 
     section 421 and textile safeguards negotiated as part of 
     China's WTO accession agreement to give relief to U.S. 
     industries especially hard hit by surges in imports from 
     China.
       Notwithstanding China's commitments at the April 2004 JCCT 
     meeting, the Commission recommends that Congress press the 
     administration to file a WTO dispute on the matter of China's 
     failure to protect intellectual property rights. China's WTO 
     obligation to protect intellectual property rights demands 
     not only that China promulgate appropriate legislation and 
     regulations, including enacting credible criminal penalties, 
     but also that these rules be enforced. China has repeatedly 
     promised, over many years, to take significant action. 
     Follow-through and action have been limited and, therefore, 
     the Commission believes that immediate U.S. action is 
     warranted.
       The Commission recommends that Congress urge the Department 
     of Commerce to make countervailing duty laws applicable to 
     nonmarket economies. If Commerce does not do so, Congress 
     should pass legislation to achieve the same effect. U.S. 
     policy currently prevents application of countervailing duty 
     laws to nonmarket economy countries such as China. This 
     limits the ability of the United States to combat China's 
     extensive use of subsidies that give Chinese companies an 
     unfair competitive advantage.
       The Commission recommends that Congress encourage the 
     administration to make a priority of obtaining and ensuring 
     China's compliance with its WTO commitments to refrain from 
     forced technology transfers that are used as a condition of 
     doing business. The transfer of technology by U.S. investors 
     in China as a direct or indirect government-imposed condition 
     of doing business with Chinese partners remains an enduring 
     U.S. security concern as well as a violation of China's WTO 
     agreement. A WTO complaint should be filed when instances 
     occur.
       The Commission recommends that Congress encourage USTR and 
     other appropriate U.S. government officials to take action to 
     ensure that the WTO's Transitional Review Mechanism process 
     is a meaningful multilateral review that measures China's 
     compliance with its WTO commitments. If China continues to 
     frustrate the TRM process, the U.S. government should 
     initiate a parallel process that includes a specific and 
     comprehensive measurement system. The United States should 
     work with the European Union, Japan, and other major trading 
     partners to produce a separate, unified annual report that 
     measures and reports on China's progress toward compliance 
     and coordinates a plan of action to address shortcomings. 
     This report should be provided to Congress. In addition, 
     independent assessments of China's WTO compliance conducted 
     by the U.S.

[[Page 12141]]

     government, such as USTR's annual report, should be used as 
     inputs in the multilateral forum evaluating China's 
     compliance, whether that forum is a reinvigorated and 
     effective TRM or a new process.
       The Commission recommends that Congress consider options to 
     assist small- and medium-sized business in pursuing trade 
     remedies under U.S. law, such as through section 421 cases.


       Chapter 3--China's Presence in the Global Capital Markets

       The Commission recommends that Congress reinstate the 
     reporting provision of the 2003 Intelligence Authorization 
     Act [P.L. 107-306, Sec 827] directing the director of Central 
     Intelligence (DCI) to prepare an annual report identifying 
     Chinese or other foreign companies determined to be engaged 
     or involved in the proliferation of weapons of mass 
     destruction or their delivery systems that have raised, or 
     attempted to raise, funds in the U.S. capital markets. The 
     Commission further recommends that Congress expand this 
     provision to require the DCI to undertake a broader review of 
     the security-related concerns of Chinese firms accessing, or 
     seeking to access, the U.S. capital markets. This should 
     include the establishment of a new interagency process of 
     consultations and coordination among the National Security 
     Council, the Treasury Department, the State Department, the 
     SEC, the Federal Bureau of Investigation (FBI), and the 
     intelligence community regarding Chinese companies listing or 
     seeking to list in the U.S. capital markets. The aim of such 
     an interagency process should be to improve collection 
     management and assign a higher priority to assessing any 
     linkages between proliferation and other security-related 
     concerns and Chinese companies, including their parents and 
     subsidiaries, with a presence in the U.S. capital markets.
       The Commission recommends that Congress require mutual 
     funds to more fully disclose the specific risks of 
     investments in China. This should include disclosure to 
     investors of the identities of any local firms subcontracted 
     by funds to perform due diligence on Chinese firms held in 
     their portfolios. Subcontractors' principal researchers, 
     location, experience, and potential conflicts of interest 
     should all be disclosed.
       The Commission recommends that Congress direct the Commerce 
     Department and USTR to evaluate whether Chinese state-owned 
     banks' practice of noncommercial-based policy lending to 
     state-owned and other enterprises constitutes an actionable 
     WTO-inconsistent government subsidy and include this 
     evaluation in the report on subsidies recommended in Chapter 
     1.
       In its 2002 Report, the Commission recommended that 
     Congress prohibit debt or equity offerings in U.S. capital 
     markets by any Chinese or foreign entity upon which the State 
     Department has imposed sanctions for engaging in the 
     proliferation of weapons of mass destruction (WMD) or 
     ballistic missile delivery systems. The Commission further 
     believes that Congress should bar U.S. institutional or 
     private investors from making debt or equity investments, 
     directly or indirectly, in firms identified and sanctioned by 
     the U.S. government for weapons proliferation-related 
     activities, whether they are listed and traded in the United 
     States or in the Chinese or other international capital 
     markets. For example, NORINCO, a company sanctioned by the 
     U.S. government, is currently available for purchase on the 
     Chinese A share market. U.S.-based qualified foreign 
     institutional investors that have rights to trade on this 
     exchange should not be permitted to invest in NORINCO or any 
     other firm officially determined to have engaged in the 
     proliferation of WMD or ballistic missiles.


   Chapter 4--China's Regional Economic and Security Impacts and the 
                   Challenges of Hong Kong and Taiwan

                          Regional engagement

       The Commission recommends that Congress revitalize U.S. 
     engagement with China's Asian neighbors by encouraging U.S. 
     diplomatic efforts to identify and pursue initiatives to 
     demonstrate the United States' firm commitment to 
     facilitating the economic and security needs of the region. 
     These initiatives should have a regional focus and complement 
     bilateral efforts. The Asia-Pacific Economic Cooperation 
     forum (APEC) offers a ready mechanism for pursuit of such 
     initiatives. The United States should consider further 
     avenues of cooperation by associating with regional forums of 
     which it is not a member.

                               Hong Kong

       The Commission recommends that Congress consult with the 
     administration to assess jointly whether the PRC's recent 
     interventions impacting Hong Kong's autonomy constitute 
     grounds for invoking the terms of the U.S.-Hong Kong Policy 
     Act with regard to Hong Kong's separate treatment. This 
     includes U.S. bilateral relations with Hong Kong in areas 
     such as air services, customs treatment, immigration quotas, 
     visa issuance, and export controls. In this context, Congress 
     should assess the implications of the National People's 
     Congress Standing Committee's intrusive interventions with 
     regard to matters of universal suffrage and direct elections. 
     Congress and the administration should continue to keep Hong 
     Kong issues on the U.S.-PRC bilateral agenda and work closely 
     with the United Kingdom on Hong Kong issues.

                          Cross-strait issues

       The Commission recommends that Congress enhance its 
     oversight role in the implementation of the Taiwan Relations 
     Act. Executive branch officials should be invited to consult 
     on intentions and report on actions taken to implement the 
     TRA through the regular committee hearing process of the 
     Congress, thereby allowing for appropriate public debate on 
     these important matters. This should include, at a minimum, 
     an annual report on Taiwan's request for any military 
     equipment and technology and a review of U.S.-Taiwan policy 
     in light of the growing importance of this issue in U.S.-
     China relations.
       The Commission recommends that the Congress and the 
     administration conduct a fresh assessment of the one China 
     policy, given the changing realities in China and Taiwan. 
     This should include a review of:
       The policy's successes, failures, and continued viability;
       Whether changes may be needed in the way the U.S. 
     government coordinates its defense assistance to Taiwan, 
     including the need for an enhanced operating relationship 
     between U.S. and Taiwan defense officials and the 
     establishment of a U.S.-Taiwan hotline for dealing with 
     crisis situations;
       How U.S. policy can better support Taiwan's breaking out of 
     the international economic isolation that the PRC seeks to 
     impose on it and whether this issue should be higher on the 
     agenda in U.S.-China relations. Economic and trade policy 
     measures that could help ameliorate Taiwan's marginalization 
     in the Asian regional economy should also be reviewed. These 
     should include enhanced U.S.-Taiwan bilateral trade 
     arrangements that would include protections for labor rights, 
     the environment, and other important U.S. interests.
       To support this policy review, the Commission recommends 
     that the appropriate committees of Congress request that the 
     executive branch make available to them a comprehensive 
     catalogue and copies of all the principal formal 
     understandings and other communications between the United 
     States and both China and Taiwan as well as other key 
     historical documents clarifying U.S. policy toward Taiwan.
       The Commission recommends that Congress consult with the 
     administration on developing appropriate ways for the United 
     States to facilitate actively cross-Strait dialogue that 
     could promote the long-term, peaceful resolution of 
     differences between the two sides and could lead to direct 
     trade and transport links and/or other cross-Strait 
     confidence-building measures. The administration should be 
     directed to report to Congress on the status of cross-Strait 
     dialogue, the current obstacles to such dialogue, and, if 
     appropriate, efforts that the United States could undertake 
     to promote such a dialogue.

 Chapter 5--China's Proliferation Practices and the Challenge of North 
                                 Korea

       Should the current stalemate in the Six Party Talks 
     continue, the Commission recommends that Congress press the 
     administration to work with its regional partners, intensify 
     its diplomacy, and ascertain North Korean and Chinese 
     intentions with a detailed and staged proposal beginning with 
     a freeze of all North Korea's nuclear weapons programs, 
     followed by a verifiable and irreversible dismantlement of 
     those programs. Further work in this respect needs to be done 
     to determine whether a true consensus on goals and process 
     can be achieved with China. If this fails, the United States 
     must confer with its regional partners to develop new options 
     to resolve expeditiously the standoff with North Korea, 
     particularly in light of public assessments that the likely 
     North Korean uranium enrichment program might reach a stage 
     of producing weapons by 2007.
       The Commission recommends that Congress press the 
     administration to renew efforts to secure China's agreement 
     to curtail North Korea's commercial export of ballistic 
     missiles and to encourage China to provide alternative 
     economic incentives for the North Koreans to substitute for 
     the foreign exchange that would be forgone as a result of 
     that curtailment.
       As recommended in the Commission's 2002 Report, and now 
     similarly proposed by President Bush and the U.N. Secretary 
     General, the Commission reiterates that Congress should 
     support U.S. efforts to work with the U.N. Security Council 
     to create a new U.N. framework for monitoring the 
     proliferation of weapons of mass destruction and their 
     delivery systems in conformance with member nations' 
     obligations under the Nuclear NonProliferation Treaty, the 
     Biological Weapons Convention, and the Chemical Weapons 
     Convention. This new monitoring body would be delegated 
     authority to apply sanctions to countries violating these 
     treaties in a timely manner or, alternatively, would be 
     required to report all violations in a timely manner to the 
     Security Council for discussion and sanctions.
       As recommended in the Commission's 2002 Report, the 
     Commission reiterates that Congress should act to broaden and 
     harmonize proliferation sanctions by amending all current 
     statutes that pertain to proliferation to

[[Page 12142]]

     include a new section authorizing the president to invoke 
     economic sanctions against foreign nations that proliferate 
     WMD and technologies associated with WMD and their delivery 
     systems. These economic sanctions would include import and 
     export limitations, restrictions on access to U.S. capital 
     markets, restrictions on foreign direct investment into an 
     offending country, restrictions on transfers by the U.S. 
     government of economic resources, and restrictions on science 
     and technology cooperation or transfers. The new authority 
     should require the President to report to Congress the 
     rationale and proposed duration of the sanctions within 
     seventy-two hours of imposing them. Although the president 
     now has the authority to select from the full range of 
     economic and security-related sanctions, these sanctions are 
     case specific and relate to designated activities within a 
     narrow set of options available on a case-by-case basis.


             Chapter 6--China's Energy Needs and Strategies

       The Commission recommends that Congress direct the 
     secretaries of State and Energy to consult with the 
     International Energy Agency with the objective of upgrading 
     the current loose experience-sharing arrangement, whereby 
     China engages in some limited exchanges with the 
     organization, to a more structured arrangement whereby the 
     PRC would be obligated to develop a meaningful strategic 
     reserve, and coordinate release of stocks in supply 
     disruption crises or speculator-driven price spikes.
       The Commission recommends that Congress encourage work that 
     increases bilateral cooperation in improving China's energy 
     efficiency and environmental performance, such as further 
     cooperation in Clean Coal Technology and waste-to-liquid-
     fuels programs, subject to any overriding concerns regarding 
     technology transfers. Further, the commission recommends that 
     Congress direct the State and Energy departments, and the 
     intelligence community, to conduct an annual review of 
     China's international energy relationships and its energy 
     practices during times of global energy crises to determine 
     whether such U.S. assistance continues to be justified.
       The Commission recommends that the Commerce Department and 
     USTR investigate whether China's dual pricing system for coal 
     and any other energy sources constitutes a prohibited subsidy 
     under the WTO and include this assessment in the Commerce/
     USTR report on subsidies recommended in Chapter 1.


 Chapter 7--China's High-Technology Development and U.S.-China Science 
                       and Technology Cooperation

       The U.S. government must develop a coordinated, 
     comprehensive national policy and strategy designed to meet 
     China's challenge to the maintenance of our scientific and 
     technological leadership. America's economic competitiveness, 
     standard of living, and national security are dependent on 
     such leadership. The Commission therefore recommends that 
     Congress charge the administration to develop and publish 
     such a strategy in the same way it is presently required to 
     develop and publish a national security strategy that deals 
     with our military and political challenges around the world. 
     In developing this strategy, the administration should 
     utilize data presently compiled by the Department of Commerce 
     to track our nation's technological competitiveness in 
     comparison with other countries.
       The Commission recommends that Congress revise the law 
     governing the CFIUS process (Title VII of the Defense 
     Production Act)--which gives the president authority to 
     investigate mergers, acquisitions, or takeovers of U.S. firms 
     by foreign persons if such activities pose a threat to 
     national security--to expand the definition of national 
     security to include the potential impact on national economic 
     security as a criterion to be reviewed. In this regard, the 
     term national economic security should be defined broadly 
     without limitation to particular industries.
       The Commission recommends that Congress direct the 
     administration to transfer chairmanship of CFIUS from the 
     Secretary of the Treasury to the Secretary of Commerce.


 Chapter 8--China's Military Modernization and the Cross-Strait Balance

       The annual report to Congress recommended in Chapter 4 on 
     Taiwan's requests for military equipment and technology 
     should include an assessment of the new military systems 
     required by Taiwan to defend against advanced PRC offensive 
     capabilities.
       As recommended in Chapter 4, Congress and the 
     administration should review the need for a direct 
     communications hotline between the United States and Taiwan 
     for dealing with crisis situations. This is important in 
     light of the short time frame of potential military scenarios 
     in the Strait, together with Chinese strategic doctrine 
     emphasizing surprise and deception.
       The Commission recommends that Congress urge the president 
     and the secretaries of State and Defense to press strongly 
     their European Union counterparts to maintain the EU arms 
     embargo on China.
       The Commission recommends that Congress direct the 
     administration to restrict foreign defense contractors who 
     sell sensitive military-use technology or weapons systems to 
     China from participating in U.S. defense-related cooperative 
     research, development, and production programs. This 
     restriction can be targeted to cover only those technology 
     areas involved in the transfer to China.
       The Commission recommends that Congress request the 
     Department of Defense to provide a comprehensive annual 
     report to the appropriate committees of Congress on the 
     nature and scope of foreign military sales to China, 
     particularly from Russia and Israel.


           Chapter 9--Media and Information Control in China

       On June 30, 2003, the Commission recommended that Congress 
     direct the Broadcasting Board of Governors to target funds 
     for efforts aimed at circumventing China's Internet firewall 
     through the development of anticensorship technologies and 
     methods. Congress approved such funding as part of the 2004 
     Omnibus Appropriations Act. The Commission recommends that 
     Congress continue this program with enhanced resources, 
     pending successful results for the current fiscal year.
       As recommended in the Commission's 2002 Report, the 
     Commission reiterates that Congress should direct the 
     Department of Commerce and other relevant agencies to conduct 
     a review of export administration regulations to determine 
     whether specific measures should be put in place to restrict 
     the export of U.S. equipment, software, and technologies that 
     permit the Chinese government to surveil its own people or 
     censor free speech.
       The Commission recommends that Congress approve legislation 
     to establish an Office of Global Internet Freedom within the 
     executive branch, tasked with implementing a comprehensive 
     global strategy to combat state-sponsored blocking of the 
     Internet and persecution of users. The strategy should 
     include the development of anticensorship technologies.
       The Commission recommends that Congress encourage the 
     administration to press China to freely admit U.S. 
     government-sponsored journalists, such as those representing 
     the Voice of America and Radio Free Asia. China frequently 
     denies visas for such journalists, despite the fact that 
     China's state-sponsored journalists are freely admitted in 
     the United States. Options should be considered for linking 
     Chinese cooperation to concrete consequences, including the 
     possible use of U.S. visas for Chinese government journalists 
     as leverage to gain admission of more U.S. government-
     supported journalists to China.

                          ____________________