STRATEGIC Act

II 117TH CONGRESS 1ST SESSION S. 687 To advance a policy for managed strategic competition with the People’s Republic of China. IN THE SENATE OF THE UNITED STATES MARCH 10, 2021 Mr. RISCH (for himself, Mr. ROMNEY, Mr. YOUNG, Mr. SULLIVAN, Mr. ROUNDS, Mr. WICKER, Mr. RUBIO, Mr. HAGERTY, and Mr. PORTMAN) introduced the following bill; which was read twice and referred to the Committee on Foreign Relations A BILL To advance a policy for managed strategic competition with the People’s Republic of China. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLES. 3 This Act may be cited as the ‘‘Strengthening Trade, 4 Regional Alliances, Technology, and Economic and Geo- 5 political Initiatives concerning China Act’’ or the ‘‘STRA- 6 TEGIC Act’’. 7 SEC. 2. TABLE OF CONTENTS. 8 The table of contents for this Act is as follows: 9 VerDate Sep 11 2014 18:56 Apr 08, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S687.IS S687 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 687 IS Sec. 1. Short titles. Sec. 2. Table of contents. Sec. 3. Definitions. TITLE I—A COMPREHENSIVE CHINA POLICY Sec. 101. Findings. Sec. 102. Statement of policy. Sec. 103. Sense of Congress. TITLE II—PROTECTING THE UNITED STATES FROM CHINA’S DISCRIMINATORY ECONOMIC PRACTICES Sec. 201. Findings and sense of Congress regarding the PRC’s industrial pol- icy. Sec. 202. Intellectual property violators list. Sec. 203. Government of the People’s Republic of China subsidies list. Sec. 204. Review of petitions related to intellectual property theft and forced technology transfer. Sec. 205. Predatory pricing by entities owned, controlled, or directed by a for- eign state. Sec. 206. Reporting on requests to comply with the corporate social credit sys- tem in the People’s Republic of China. Sec. 207. Annual review on the presence of Chinese companies in United States capital markets. TITLE III—REINVESTING IN AMERICAN AND ALLIED TECHNOLOGICAL COMPETITIVENESS Sec. 301. Regulatory exchanges with allies and partners. Sec. 302. Authorization to assist United States companies with supply chain di- versification and management. Sec. 303. Scientific and private sector advisory panel on protection of critical technologies. Sec. 304. Establishment of a tech coalition. Sec. 305. United States representation in standards-setting bodies. TITLE IV—SAFEGUARDING AMERICAN INSTITUTIONS Sec. 401. Amendment to Foreign Agent Registration Act regarding gifts made to universities. Sec. 402. Designation of a country of national security concern in the Foreign Agent Registration Act. Sec. 403. Ban on Senate-confirmed Department of State officials representing countries of national security concern. Sec. 404. Amendment to the Mutual Educational and Cultural Exchange Act. TITLE V—MAINTAINING THE INTEGRITY OF INTERNATIONAL ORGANIZATIONS Sec. 501. Office of Integrity in the United Nations system. TITLE VI—BOLSTERING UNITED STATES AND ALLIED DEFENSE AND SECURITY Sec. 601. Findings. VerDate Sep 11 2014 18:56 Apr 08, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\S687.IS S687 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 687 IS Sec. 602. Statement of policy expressing the political will of the United States to defend its interests in the Indo-Pacific and pursue expanded political-military cooperation with allies and partners. Sec. 603. Sense of Congress regarding bolstering security partnerships in the Indo-Pacific. Sec. 604. Report on capability development of Indo-Pacific allies and partners. Sec. 605. Statement of policy on unmanned aerial systems and the missile tech- nology control regime. Sec. 606. Report on national technology and industrial base. Sec. 607. Authorization of appropriations for Southeast Asia maritime security programs and diplomatic outreach activities. Sec. 608. Report on China Coast Guard. Sec. 609. Report on Chinese military activity in Djibouti. Sec. 610. Statement of policy regarding universal implementation of United Nations sanctions on North Korea. TITLE VII—ENSURING STRATEGIC SECURITY Sec. 701. Findings on strategic security and arms control. Sec. 702. Cooperation on a strategic nuclear dialogue. Sec. 703. Agreements. SEC. 3. DEFINITIONS. 1 In this Act: 2 (1) CCP.—The term ‘‘CCP’’ means the Chinese 3 Communist Party. 4 (2) CENTRALLY ADMINISTERED, STATE-OWNED 5 ENTERPRISE.—The term ‘‘centrally administered, 6 state-owned enterprise’’ means any company that 7 previously was or currently is— 8 (A)(i) incorporated in the PRC; and 9 (ii) supervised and managed by the State- 10 owned Assets Supervision and Administration 11 Commission of the State Council of the PRC; 12 or 13 (B) an owned or controlled subsidiary of 14 an enterprise meeting the requirements under 15 subparagraph (A). 16 VerDate Sep 11 2014 18:56 Apr 08, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S687.IS S687 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 687 IS (3) PEOPLE’S LIBERATION ARMY; PLA.—The 1 terms ‘‘People’s Liberation Army’’ and ‘‘PLA’’ mean 2 the armed forces of the People’s Republic of China. 3 (4) PRC; CHINA.—The terms ‘‘PRC’’ and 4 ‘‘China’’ mean the People’s Republic of China. 5 TITLE I—A COMPREHENSIVE 6 CHINA POLICY 7 SEC. 101. FINDINGS. 8 Congress makes the following findings: 9 (1) The People’s Republic of China has in- 10 creased its political, diplomatic, economic, military, 11 technological, and ideological power to become a 12 strategic, near-peer, global competitor of the United 13 States. The policies increasingly pursued by the 14 PRC in each of these domains are contrary to the 15 interests and values of the United States, its part- 16 ners, and much of the rest of the world. 17 (2) The current competition between the United 18 States and the PRC— 19 (A) is taking place over the future char- 20 acter of the international order; 21 (B) will shape the rules, norms, and insti- 22 tutions that govern relations among states in 23 the coming decades; 24 VerDate Sep 11 2014 18:56 Apr 08, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S687.IS S687 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 687 IS (C) will determine the ability of the United 1 States to secure its national interests; and 2 (D) will determine future levels of peace, 3 prosperity, and freedom for the United States 4 and the international community in the coming 5 decades. 6 (3) After normalizing diplomatic relations with 7 the PRC in 1979, the United States actively worked 8 to advance the PRC’s economic and social develop- 9 ment to ensure that it participated in, and benefitted 10 from, the free and open international order. The 11 United States pursued these goals and contributed 12 to the welfare of the Chinese people by— 13 (A) increasing the PRC’s trade relations 14 and access to global capital markets; 15 (B) promoting the PRC’s accession to the 16 World Trade Organization; 17 (C) providing development finance and 18 technical assistance; 19 (D) promoting research collaboration; 20 (E) educating the PRC’s top students; 21 (F) permitting transfers of cutting-edge 22 technologies and scientific knowledge; and 23 (G) providing intelligence and military as- 24 sistance. 25 VerDate Sep 11 2014 18:56 Apr 08, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S687.IS S687 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 687 IS (4) It is now clear that the PRC has no inten- 1 tion of reforming politically or economically. Instead, 2 it is pursuing state-led, mercantilist economic poli- 3 cies, increasing restrictions on personal freedoms, 4 and implementing an aggressive and assertive for- 5 eign policy. These policies frequently and delib- 6 erately undermine United States interests and are 7 contrary to core United States values and the values 8 of other nations, both in the Indo-Pacific and be- 9 yond. In response to this strategic decision of the 10 PRC, the United States was compelled to reexamine 11 and revise its strategy towards the PRC. 12 (5) The General Secretary of the Chinese Com- 13 munist Party and the President of the People’s Re- 14 public of China, Xi Jinping, has elevated the ‘‘Great 15 Rejuvenation of the Chinese Nation’’ as central to 16 the domestic and foreign policy of the PRC. His pro- 17 gram demands— 18 (A) strong, centralized CCP leadership; 19 (B) concentration of military power; 20 (C) a strong role for the CCP in the state 21 and the economy; 22 (D) an aggressive foreign policy seeking 23 control over broadly asserted territorial claims; 24 and 25 VerDate Sep 11 2014 18:56 Apr 08, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S687.IS S687 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 687 IS (E) the denial of any universal values and 1 individual rights that are deemed to threaten 2 the CCP. 3 (6) The PRC views its Leninist model of gov- 4 ernance, ‘‘socialism with Chinese characteristics’’, as 5 superior to, and at odds with, the constitutional 6 models of the United States and other democracies. 7 This approach to governance is lauded by the CCP 8 as essential to securing the PRC’s status as a global 9 leader, and to shaping the future of the world. In a 10 2013 speech, President Xi said, ‘‘We firmly believe 11 that as socialism with Chinese characteristics devel- 12 ops further . . . it is . . . inevitable that the superi- 13 ority of our socialist system will be increasingly ap- 14 parent . . . [and] our country’s road of development 15 will have increasingly greater influence on the 16 world.’’. 17 (7) The PRC’s objectives are to first establish 18 regional hegemony over the Indo-Pacific and then to 19 use that dominant position to propel the PRC to be- 20 come the ‘‘leading world power’’. The PRC seeks to 21 shape an international order that is conducive to the 22 interests of authoritarian and autocratic regimes. 23 Achieving these objectives requires turning the PRC 24 into a wealthy nation under strict CCP rule by using 25 VerDate Sep 11 2014 18:56 Apr 08, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S687.IS S687 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 687 IS a strong military and advanced technological capa- 1 bility to pursue the PRC’s objectives, regardless of 2 other countries’ interests. 3 (8) The PRC is reshaping the current inter- 4 national order, which was built upon free and open 5 ideals and principles, by conducting global informa- 6 tion and influence operations, redefining inter- 7 national laws and norms to align with the objectives 8 of the CCP, rejecting the legitimacy of internation- 9 ally recognized human rights, and securing leader- 10 ship positions in multinational organizations to alter 11 their agendas. In December 2018, President Xi sug- 12 gested that the CCP views its ‘‘historic mission’’ as 13 not only to govern China, but also to profoundly in- 14 fluence global governance to benefit the CCP. 15 (9) The PRC is encouraging other countries to 16 follow its model of ‘‘socialism with Chinese charac- 17 teristics’’. During the 19th Party Congress in 2017, 18 President Xi said that the PRC could serve as a 19 model of development for other countries by utilizing 20 ‘‘Chinese wisdom’’ and a ‘‘Chinese approach to solv- 21 ing problems’’. 22 (10) The PRC is promoting its governance 23 model and attempting to weaken other models of 24 governance by— 25 VerDate Sep 11 2014 18:56 Apr 08, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S687.IS S687 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 687 IS (A) undermining democratic institutions; 1 (B) subverting financial institutions; 2 (C) coercing businesses to accommodate 3 the policies of the CCP; and 4 (D) using disinformation to disguise the 5 nature of the actions described in subpara- 6 graphs (A) through (C). 7 (11) The PRC is getting close to its goal of be- 8 coming the global leader in science and technology. 9 In May 2018, President Xi said that for the PRC 10 to reach ‘‘prosperity and rejuvenation’’, it needs to 11 ‘‘endeavor to be a major world center for science and 12 innovation’’. The PRC has invested the equivalent of 13 billions of dollars into education and research and 14 development and established joint scientific research 15 centers and science universities. Scientists and schol- 16 ars from the PRC have made numerous contribu- 17 tions to a wide array of fields, including through 18 international partnerships. 19 (12) The PRC’s drive, however, to become a 20 ‘‘manufacturing and technological superpower’’ and 21 to promote ‘‘innovation with Chinese characteristics’’ 22 is coming at the expense of human rights, national 23 security, and longstanding international rules and 24 norms about economic competition. In particular, 25 VerDate Sep 11 2014 18:56 Apr 08, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S687.IS S687 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 687 IS the PRC advances its illiberal political and social 1 policies through mass surveillance, social credit sys- 2 tems, and a significant role of the state in internet 3 governance. Through these means, the PRC in- 4 creases direct and indirect government control over 5 its citizens’ everyday lives. Its national strategy of 6 ‘‘civil-military fusion’’ mandates that civil and com- 7 mercial research, which increasingly drives global in- 8 novation, is leveraged to develop new military capa- 9 bilities. 10 (13) The PRC is using legal and illegal means 11 to achieve its objective of becoming a manufacturing 12 and technological superpower. The PRC uses state- 13 directed industrial policies in anticompetitive ways to 14 ensure the dominance of PRC companies. The CCP 15 engages in and encourages actions that actively un- 16 dermine a free and open international market, such 17 as intellectual property theft, forced technology 18 transfers, regulatory and financial subsidies, and 19 mandatory CCP access to proprietary data as part 20 of business and commercial agreements between Chi- 21 nese and foreign companies. 22 (14) The policies referred to in paragraph (13) 23 freeze United States and other foreign firms out of 24 the PRC market, while eroding competition in other 25 VerDate Sep 11 2014 18:56 Apr 08, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S687.IS S687 pamtmann on DSKBC07HB2PROD with BILLS 11 •S 687 IS important markets. The heavy subsidization of Chi- 1 nese companies includes potential violation of its 2 World Trade Organization commitments. In May 3 2018, President Xi said that the PRC aims to keep 4 the ‘‘initiatives of innovation and development secu- 5 rity . . . in [China’s] own hands’’. 6 (15) The PRC advances its global objectives 7 through a vari [Text truncated for display. Full text available on Congress.gov.]