THE UNITED STATES-CHINA ECONOMIC SECURITY REVIEW COMMISSION.

SEC. 1234. THE UNITED STATES-CHINA ECONOMIC SECURITY REVIEW COMMISSION.(a) Findings.—Congress finds the following:(1) The 2004 Report to Congress of the United States-China Economic and Security Review Commission states that—(A) China’s State-Owned Enterprises (SOEs) lack adequate disclosure standards, which creates the potential for United States investors to unwittingly contribute to enterprises that are involved in activities harmful to United States security interests;(B) United States influence and vital long-term interests in Asia are being challenged by China’s robust regional economic engagement and diplomacy;(C) the assistance of China and North Korea to global ballistic missile proliferation is extensive and ongoing;(D) China’s transfers of technology and components for weapons of mass destruction (WMD) and their delivery systems to countries of concern, including countries that support acts of international terrorism, have helped create a new tier of countries with the capability to produce WMD and ballistic missiles;(E) the removal of the European Union arms embargo against China that is currently under consideration in the European Union would accelerate weapons modernization and dramatically enhance Chinese military capabilities;119 STAT. 3471(F) China is developing a leading-edge military with the objective of intimidating Taiwan and deterring United States involvement in the Taiwan Strait, and China’s qualitative and quantitative military advancements have already resulted in a dramatic shift in the cross-Strait military balance toward China; and(G) China’s growing energy needs are driving China into bilateral arrangements that undermine multilateral efforts to stabilize oil supplies and prices, and in some cases may involve dangerous weapons transfers.(2) On March 14, 2005, the National People’s Congress approved a law that would authorize the use of force if Taiwan formally declares independence.(b) Sense of Congress for Comprehensive Strategy.—It is the sense of Congress that the President should present to Congress quickly a comprehensive strategy to—(1) address the emergence of China economically, diplomatically, and militarily;(2) promote mutually beneficial trade relations with China; and(3) encourage China’s adherence to international norms in the areas of trade, international security, and human rights.(c) Contents of Strategy.—The strategy referred to in subsection (b) should address the following:(1) Actions to address China’s policy of undervaluing its currency, including—(A) encouraging China to continue to upwardly revalue the Chinese yuan against the United States dollar;(B) allowing the yuan to float against a trade-weighted basket of currencies; and(C) concurrently encouraging United States trading partners with similar interests to join in these efforts.(2) Actions to make better use of the World Trade Organization (WTO) dispute settlement mechanism and applicable United States trade laws to redress China’s trade practices, including—(A) exchange rate manipulation;(B) denial of trading and distribution rights;(C) insufficient intellectual property rights protection;(D) objectionable labor standards;(E) subsidization of exports; and(F) forced technology transfers as a condition of doing business.(3) The United States Trade Representative should consult with United States trading partners regarding any trade dispute with China.(4) Actions to encourage United States diplomatic efforts to identify and pursue initiatives to revitalize United States engagement in East Asia. The 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.(5) Actions by the administration to work with China to prevent proliferation of prohibited technologies and to secure China’s agreement to renew efforts to curtail commercial export by North Korea of ballistic missiles.119 STAT. 3472(6) Actions by the Secretary of State and the Secretary of Energy to consult with the International Atomic 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.(7) Actions by the administration to develop a coordinated, comprehensive national policy and strategy designed to maintain United States scientific and technological leadership and competitiveness, in light of the rise of China and the challenges of globalization.(8) Actions to review laws and regulations governing the Committee on Foreign Investment in the United States (CFIUS), including exploring whether the definition of national security should include the potential impact on national economic security as a criterion to be reviewed, and whether the chairmanship of CFIUS should be transferred from the Secretary of the Treasury to a more appropriate executive branch agency.(9) Actions by the President and the Secretary of State and Secretary of Defense to press strongly their counterparts in the European Union and its member states to maintain and strengthen the embargo on selling arms to China.(10) Actions by the administration to discourage foreign defense contractors from selling sensitive military-use technology or weapons systems to China.