[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H. Res. 414 Engrossed in House (EH)]
In the House of Representatives, U.S.,
October 29, 2003.
Whereas United States investors and exporters to the People's Republic of China
recognize the opportunity of doing business with China but have raised
serious concerns that many of the commitments China made upon joining
the World Trade Organization have not yet been implemented or
implementation has been inadequate;
Whereas market barriers and unfair trade practices continue to exist, including
high tariffs, subsidies, technical trade restrictions, counterfeiting,
tied trade, violations of intellectual property rights, and nonmarket-
based industrial policies that limit United States exports;
Whereas increases in global trade will lead to faster growth of the United
States economy and an improved quality of life for workers in the
People's Republic of China;
Whereas China is one of the fastest-growing economies in the world and an
important expanding market for United States exports;
Whereas China has made progress in implementing the commitments that it made
upon joining the World Trade Organization, including the required
reduction of its tariffs on many industrial goods of importance to
United States manufacturers;
Whereas China must move more quickly to implement its World Trade Organization
commitments fully and to remove many market access barriers;
Whereas the currency of the People's Republic of China, the renminbi, has been
fixed relative to the United States dollar since 1994;
Whereas a systemically misvalued currency by any large country can have damaging
trade-distorting effects on both that country and its trading partners
by decreasing the price of exports of products of that country and
increasing the price of imports to that country;
Whereas China's trade liberalization will cause economic imbalances in its
market and world markets unless China also implements capital account
liberalization;
Whereas the market-based valuation of currencies is a key component to resilient
global trading systems by enabling smoother transitions to reflect
underlying economic fundamentals in a country;
Whereas China's substantial foreign reserves reduce China's susceptibility to
currency crises and, therefore, the need for continued use of a fixed
currency;
Whereas the International Monetary Fund (IMF) has advised China to adopt a more
flexible exchange rate policy, and has indicated that such a change
would not have serious adverse consequences for that country, although
IMF officials have expressed concern about the weakness of China's
banking system and that it may not have the ability to move quickly
towards a floating rate;
Whereas the Joint Ministerial Statement in September 2003 of the Asia-Pacific
Economic Cooperation Finance Ministerial Meeting ``emphasized the
importance of accelerating structural reform, adopting macroeconomic
policies that promote sustainable growth, supported by appropriate
exchange rate policies that facilitate orderly and balanced external
adjustment . . . [and] noted a view expressed at the meeting that more
flexible exchange rate management, in some cases, would promote this
objective'';
Whereas the Group of Seven Finance Ministers and Central Bank Governors in their
September 2003 Communique have emphasized that ``more flexibility in
exchange rates is desirable for major countries or economic areas to
promote smooth and widespread adjustments in the international financial
system, based on market mechanisms'';
Whereas China's central bank governor has stated that the value of the renminbi
will eventually be determined by market forces rather than be fixed to
the dollar but has not given any indication of when this change in
policy will occur;
Whereas China recognizes that it is in its own interest to reform its exchange
rate regime and its banking system in order to establish a resilient
economy and control its rate of economic expansion;
Whereas China is taking concrete steps to move to a more flexible exchange rate
regime by increasing private ownership of its banking system and by
establishing a technical working group on a range of financial sector
issues, including exchange rate policy;
Whereas manufacturing is important to the health of the United States economy,
generating high quality products, personal opportunity, productive
careers, wealth, high standards of living, and economic growth;
Whereas the manufacturing sector is the leading source of new patents and
innovation in the United States economy, which helps drive economic
growth at home and abroad;
Whereas the manufacturing sector faces the most intense global competition in
United States history, making it difficult for many firms to operate
profitably and earn a sufficient return on capital invested, and
manufacturing costs continue to increase for many reasons, including
governmental actions; and
Whereas the manufacturing sector in the United States seeks a global level
playing field for competition and markets: Now, therefore, be it
Resolved, That--
(1) the House of Representatives commends the President and his
Administration for continued efforts to engage the Government of the
People's Republic of China directly and to encourage China to fulfill
its commitments as a member of the World Trade Organization;
(2) the House of Representatives encourages the People's Republic of
China to meet its commitments to the trade rules and principles of the
international community of which it is now a member;
(3) the Chinese economy would benefit from an exchange rate
determined by the market in order to avoid artificial rates that can
lead to market and trade distortions;
(4) the House of Representatives will continue to monitor closely
and work with the Administration to encourage China's efforts to
modernize its financial system, establish a more flexible exchange rate,
and comply with its trade agreement obligations;
(5) the House of Representatives urges the Administration to
continue its intensive discussions with officials from the Government of
the People's Republic of China to facilitate moves towards a market-
based valuation of the renminbi, relaxation of capital controls, and
reform of its banking sector; and
(6) manufacturing is an important sector to the United States
economy and, therefore, the United States Government should intensify
efforts to promote innovation, reduce costs, and level the international
playing field for this sector.
Attest:
Clerk.