[House Report 118-294]
[From the U.S. Government Publishing Office]


118th Congress   }                                      {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session     }                                      {      118-294

======================================================================



 
              CHINESE CURRENCY ACCOUNTABILITY ACT OF 2023

                                _______
                                

December 1, 2023.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

 Mr. McHenry, from the Committee on Financial Services, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 510]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
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, having considered the same, 
reports favorably thereon with an amendment and recommends that 
the bill as amended do pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

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.

                          PURPOSE AND SUMMARY

    Introduced on January 25, 2023, by Representative Warren 
Davidson, H.R. 510, the Chinese Currency Accountability Act of 
2023, requires the Secretary of the Department of the Treasury 
to oppose an increase in the weight of China's renminbi (RMB) 
in the basket of currencies used to value the International 
Monetary Fund's (IMF) Special Drawing Rights (SDR), as long as 
China fails to meet certain international standards. H.R. 510 
is essential to prevent the further rise of the RMB in 
determining the value of SDRs, a major international reserve 
asset. The bill would help prevent additional increases in the 
RMB's weighting until China complies with key international 
standards, including the IMF's own rules. The valuation of the 
SDR should focus on currencies issued by countries with 
independent central banks and transparent exchange rate 
policies.

                  BACKGROUND AND NEED FOR LEGISLATION

    The SDR are a reserve asset for IMF members that gives 
countries a claim on five ``freely usable currencies''--the 
dollar, euro, sterling, yen, and RMB. SDRs also serve as a unit 
of account for IMF lending. The SDR currencies determine the 
value of an SDR and influence the SDR borrowing and lending 
rate--the SDRi. In 2016, the IMF added the RMB to the SDR's 
currency basket, even though the RMB at the time lagged the 
Canadian and Australian dollars as an international reserve 
currency. In 2022, the IMF went further by increasing the 
weight of the RMB in the SDR basket from 10.92 percent to 12.28 
percent, making it the third-most prominent currency in the 
basket behind the dollar and euro. The IMF undertook this step 
despite China's lack of an independent central bank and free-
floating currency, as well as the country's non-transparent 
policies for exchange rate management.

                                HEARING

    Pursuant to clause 3(c)(6) of rule XIII, the following 
hearing was used to develop H.R. 510: The Committee on 
Financial Services held a hearing on February 7, 2023, titled 
``Combatting the Economic Threat from China.''

                        COMMITTEE CONSIDERATION

    The Committee on Financial Services met in open session on 
February 28, 2023, and ordered H.R. 510 to be reported 
favorably to the House as amended by a recorded vote of 40 ayes 
to 0 nays (Record vote no. FC-19), a quorum being present. 
Before the question was called to order the bill favorably 
reported, the Committee adopted an amendment in the nature of a 
substitute offered by Mr. Davidson by voice vote.

                            COMMITTEE VOTES

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record votes 
on the order to report legislation and amendments thereto. H.R. 
510 was ordered reported favorably to the House as amended by a 
recorded vote of 40 ayes to 0 nays (Record vote no. FC-19), a 
quorum being present.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      COMMITTEE OVERISGHT FINDINGS

    Pursuant to clause 3(c) of rule XIII of the Rules of the 
House of Representatives, the findings and recommendations of 
the Committee based on oversight activities under clause 
2(b)(1) of rule X of the Rules of the House of Representatives, 
are incorporated in the descriptive portions of this report.

                    PERFORMANCE GOALS AND OBJECTIVES

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the goal of H.R. 510 is to require 
the Treasury Secretary to oppose an increase in the weight of 
China's RMB in the basket of currencies used to value the IMF's 
SDR, as long as China fails to meet certain international 
standards.

                 CONGRESSIONAL BUDGET OFFICE ESTIMATES

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    Pursuant to clause 3(c)(2) of rule XIII of the Rules of the 
House of Representatives, the Committee adopts as its own the 
estimate of new budget authority, entitlement authority, or tax 
expenditures or revenues contained in the cost estimate 
prepared by the Director of the Congressional Budget Office 
pursuant to section 402 of the Congressional Budget Act of 
1973.

                       FEDERAL MANDATES STATEMENT

    Pursuant to section 423 of the Unfunded Mandates Reform 
Act, the Committee adopts as its own the estimate of the 
Federal mandates prepared by the Director of the Congressional 
Budget Office.

                      ADVISORY COMMITTEE STATEMENT

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  APPLICABILITY TO LEGISLATIVE BRANCH

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of section 
102(b)(3) of the Congressional Accountability Act.

                         EARMARK IDENTIFICATION

    Pursuant to clause 9 of rule XXI of the Rules of the House 
of Representatives, the Committee has carefully reviewed the 
provisions of the bill and states that the provisions of the 
bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                    DUPLICATION OF FEDERAL PROGRAMS

    Pursuant to clause 3(c)(5) of rule XIII of the Rules of the 
House of Representatives, the Committee states that no 
provision of the bill establishes or reauthorizes a program of 
the Federal Government known to be duplicative of another 
Federal program, including any program that was included in a 
report to Congress pursuant to section 21 of the Public Law 
111-139 or the most recent Catalog of Federal Domestic 
Assistance.

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Sec. 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

    This section requires the Treasury Secretary, through the 
United States Governor and Executive Director at the IMF, to 
oppose an increase in the weight of China's renminbi in the 
basket of currencies determining the value of IMF Special 
Drawing Rights, unless China meets certain international 
standards.

Sec. 3. Sunset

    This section states the bill expires after 10 years.

                                  [all]