What This Bill Does
This bill tells the United States Treasury Secretary to instruct the American representative at the International Monetary Fund (a global organization that helps countries with financial matters) to push for China to be more transparent about how it manages its currency's value. The bill aims to increase monitoring of China's exchange rate policies (the official value of one country's money compared to another country's money) to ensure China is following international agreements.
Who It Affects
The Secretary of the Treasury and the United States Executive Director at the International Monetary Fund are directly required to take action under this bill.
Key Provisions
- The Treasury Secretary must instruct the U.S. representative at the IMF to advocate for increased transparency from China regarding its exchange rate arrangements, including indirect currency intervention through Chinese financial institutions and state-owned enterprises (companies owned by the government) (Sec. 3)
- The U.S. representative must push for the IMF to conduct enhanced surveillance (careful monitoring) of China's exchange rate policies, both through multilateral (involving multiple countries) and bilateral (between two countries) discussions (Sec. 3)
- During IMF governance reviews, the U.S. representative should encourage stronger evaluation of whether China acts responsibly in the international monetary system when considering China's quota (a country's share of voting power) and voting shares at the IMF (Sec. 3)
What Changes
If this becomes law, the U.S. representative at the International Monetary Fund must actively advocate for China to provide more information about how it manages its currency and to follow orderly exchange rate practices consistent with other major economies.
Important Definitions
Exchange rate: The official value of one country's money compared to another country's money.
Special Drawing Rights: Not specified in bill text.
Effective Date
This bill will stop having any legal effect 30 days after whichever comes first: (1) when the U.S. Governor of the IMF reports to Congress that China is following its international agreements on currency management and its policies match those of other major economies, or (2) 7 years after this bill becomes law (Sec. 4).
IIB
118TH CONGRESS
2D SESSION
H. R. 839
IN THE SENATE OF THE UNITED STATES
JANUARY 16, 2024
Received; read twice and referred to the Committee on Foreign Relations
AN ACT
To require the United States Executive Director at the Inter-
national Monetary Fund to advocate for increased trans-
parency with respect to exchange rate policies of the
People’s Republic of China, and for other purposes.
Be it enacted by the Senate and House of Representa-
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tives of the United States of America in Congress assembled,
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SECTION 1. SHORT TITLE.
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This Act may be cited as the ‘‘China Exchange Rate
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Transparency Act of 2023’’.
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SEC. 2. FINDINGS.
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The Congress finds as follows:
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(1) Under Article IV of the Articles of Agree-
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ment of the International Monetary Fund (IMF),
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the People’s Republic of China has committed to or-
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derly exchange rate arrangements, the avoidance of
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exchange rate manipulation, and cooperation with
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the IMF to ensure ‘‘firm surveillance’’ of the ex-
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change rate policies of the People’s Republic of
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China. Pursuant to Article VIII of the Articles of
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Agreement of the IMF, the IMF may require the
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People’s Republic of China to furnish data on gold
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and foreign exchange holdings, including assets held
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by non-official agencies of the People’s Republic of
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China.
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(2) In its November 2022 report, entitled
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‘‘Macroeconomic and Foreign Exchange Policies of
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Major Trading Partners of the United States’’, the
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Department of the Treasury concluded, ‘‘China pro-
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vides very limited transparency regarding key fea-
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tures of its exchange rate mechanism, including the
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policy objectives of its exchange rate management
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regime and its activities in the offshore RMB mar-
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ket.’’. The Department continued: ‘‘China’s lack of
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transparency and use of a wide array of tools com-
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plicate Treasury’s ability to assess the degree to
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which official actions are designed to impact the ex-
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change rate.’’.
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(3) In that report, the Department further
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noted that ‘‘China’s failure to publish foreign ex-
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change intervention and broader lack of trans-
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parency around key features of its exchange rate
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mechanism make it an outlier among major econo-
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mies and warrants Treasury’s close monitoring.’’.
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SEC. 3. ADVOCACY FOR INCREASED EXCHANGE RATE
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TRANSPARENCY FROM CHINA.
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The Secretary of the Treasury shall instruct the
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United States Executive Director at the International
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Monetary Fund (in this Act referred to as the ‘‘IMF’’)
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to use the voice and vote of the United States to advocate
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for—
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(1) increased transparency from the People’s
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Republic of China, and enhanced multilateral and bi-
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lateral surveillance by the IMF, with respect to the
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exchange rate arrangements of the People’s Republic
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of China, including any indirect foreign exchange
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market intervention through Chinese financial insti-
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tutions or state-owned enterprises;
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(2) in connection with consultations with the
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People’s Republic of China under Article IV of the
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Articles of Agreement of the IMF, the inclusion of
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any significant divergences by the People’s Republic
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of China from the exchange rate policies of other
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issuers of currencies used in determining the value
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of Special Drawing Rights; and
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(3) during governance reviews of the IMF,
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stronger consideration by IMF members and man-
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agement of the performance of China as a respon-
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sible stakeholder in the international monetary sys-
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tem when evaluating quota and voting shares at the
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IMF.
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SEC. 4. SUNSET.
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This Act shall have no force or effect on or after the
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date that is 30 days after the earlier of—
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(1) the date that the United States Governor of
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the IMF reports to the Congress that the People’s
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Republic of China—
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(A) is in substantial compliance with obli-
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gations of the People’s Republic of China under
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the Articles of Agreement of the IMF regarding
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orderly exchange rate arrangements; and
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(B) has undertaken exchange rate policies
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and practices consistent with those of other
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issuers of currencies used in determining the
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value of Special Drawing Rights; and
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(2) the date that is 7 years after the date of the
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enactment of this Act.
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Passed the House of Representatives January 12,
2024.
Attest:
KEVIN F. MCCUMBER,
Clerk.
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