[House Report 118-72]
[From the U.S. Government Publishing Office]


118th Congress    }                                     {       Report
                        HOUSE OF REPRESENTATIVES
 1st Session      }                                     {       118-72

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



 
             CHINA FINANCIAL THREAT MITIGATION ACT OF 2023

                                _______
                                

  May 22, 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. 1156]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 1156) to require the Secretary of the Treasury 
to conduct a study and report on the exposure of the United 
States to the financial sector of the People's Republic of 
China, 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 ``China Financial Threat Mitigation Act 
of 2023''.

SEC. 2. CHINA FINANCIAL THREAT MITIGATION.

  (a) Report.--Not later than one year after the date of the enactment 
of this Act, the Secretary of the Treasury, in consultation with the 
Chairman of the Board of Governors of the Federal Reserve System, the 
Chairman of the Securities and Exchange Commission, the Chairman of the 
Commodity Futures Trading Commission, and the Secretary of State, shall 
conduct a study and issue a report on the exposure of the United States 
to the financial sector of the People's Republic of China that 
includes--
          (1) an assessment of the effects of reforms to the financial 
        sector of the People's Republic of China on the United States 
        and global financial systems;
          (2) a description of the policies the United States 
        Government is adopting to protect the interests of the United 
        States while the financial sector of the People's Republic of 
        China undergoes such reforms;
          (3) a description and analysis of any risks to the financial 
        stability of the United States and the global economy emanating 
        from the People's Republic of China; and
          (4) recommendations for additional actions the United States 
        Government, including United States representatives at relevant 
        international organizations, should take to strengthen 
        international cooperation to monitor and mitigate such 
        financial stability risks and protect United States interests.
  (b) Transmission of Report.--The Secretary of the Treasury shall 
transmit the report required under subsection (a) not later than one 
year after the date of enactment of this Act to the Committees on 
Financial Services and Foreign Affairs of the House of Representatives, 
the Committees on Banking, Housing, and Urban Affairs and Foreign 
Relations of the Senate, and to the United States representatives at 
relevant international organizations, as appropriate.
  (c) Classification of Report.--The report required under subsection 
(a) shall be unclassified, but may contain a classified annex.
  (d) Publication of Report.--The Secretary of the Treasury shall 
publish the report required under subsection (a) (other than any 
classified annex) on the website of the Department of the Treasury not 
later than one year after the date of enactment of this Act.

                          PURPOSE AND SUMMARY

    Introduced on February 24, 2023, by Representative Abigail 
Spanberger, the China Financial Threat Mitigation Act of 2023 
requires the Secretary of the Department of the Treasury to 
report to Congress on global economic risks emanating from the 
Chinese financial sector. The bill is necessary to better 
understand the governance, opacity, and potential instability 
of the Chinese financial system.

                  BACKGROUND AND NEED FOR LEGISLATION

    H.R. 1156 results from previous bipartisan Committee 
discussions to require a Treasury report on financial stability 
risks emanating from China. Such risks have previously been 
addressed in the annual report of the Financial Stability 
Oversight Council, but in limited detail. Secretary Yellen has 
also addressed Chinese financial risks in response to 
Republican questioning before the Committee, particularly with 
respect to China's real estate sector. Understanding these 
risks will help U.S. officials better evaluate overall risks to 
the global economy and work through such bodies as the IMF and 
Financial Stability Board to mitigate them.

                                HEARING

    The Committee on Financial Services held a hearing 
examining matters relating to H.R. 1156 on February 7, 2023.

                        COMMITTEE CONSIDERATION

    The Committee on Financial Services met in open session on 
February 28, 2023, and ordered H.R. 1156 to be reported 
favorably to the House as amended by a recorded vote of 40 ayes 
to 0 nays (Record vote no. FC-16), a quorum being present. 
Before the question to report was called, the Committee adopted 
an amendment in the nature of a substitute offered by Ms. 
Spanberger by voice vote.

                            COMMITTEE VOTES

    Clause 2(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. 
1156 was reported favorably to the House as amended by a 
recorded vote of 40 ayes to 0 nays (Record vote no. FC-16), a 
quorum being present.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

                      COMMITTEE OVERSIGHT 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. 1156 is to better 
understand the governance, opacity, and potential instability 
of the Chinese financial system through a report to Congress 
from the Secretary of the Department of the Treasury on global 
economic risks emanating from the Chinese financial sector.

   NEW BUDGET AUTHORITY, ENTITLEMENT AUTHORITY, AND TAX EXPENDITURES

    In compliance with 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.

                 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]


    H.R. 1156 would require the Secretary of the Treasury, 
within one year of enactment, to study and report on the 
financial exposure of the United States and the global economy 
to changes in China's financial sector. The bill also would 
direct the Secretary to consult with the Board of Governors of 
the Federal Reserve System, the Securities and Exchange 
Commission, the Commodity Futures Trading Commission, and the 
Department of State for the study.
    Using information about the cost of similar requirements, 
CBO estimates that implementing H.R. 1156 would cost federal 
agencies about $1 million over the 2023-2024 period. Such 
spending would be subject to the availability of appropriated 
funds.
    Costs incurred by the Federal Reserve reduce remittances to 
the Treasury, which are recorded in the budget as revenues. CBO 
estimates that the reduction in remittances attributable to 
implementing H.R. 1156 would not be significant over the 2023-
2033 period.

                       FEDERAL MANDATES STATEMENT

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995.
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

                      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 the section 
102(b)(3) of the Congressional Accountability Act.

                         EARMARK IDENTIFICATION

    With respect to clause 9 of rule XIII 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

    In compliance with 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: (1) a 
program of the Federal Government known to be duplicative of 
another Federal program; (2) a program included in any report 
form the Government Accountability Office to Congress pursuant 
to section 21 of Public Law 111-139; or (3) a program related 
to a program identified in the most recent Catalog of Federal 
Domestic Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 85-220, as amended by Pub. L. No. 
98-169).

             SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Sec. 1: Short title

    This Act may be cited as the ``China Financial Threat 
Mitigation Act of 2023''.

Sec. 2: China financial threat mitigation

    This section would require the Treasury Secretary to report 
to Congress, the U.S. Executive Director at the IMF, and the 
U.S. representative to the Financial Stability Board on global 
economic risks emanating from the Chinese financial sector 
within one year of enactment.

         CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED

    H.R. 1156 does not repeal or amend any section of a 
statute. Therefore, the Office of Legislative Counsel did not 
prepare the report contemplated by clause 3(e)(1)(B) of rule 
XIII of the House of Representatives.

                                  [all]