STRATEGIC Act

II 116TH CONGRESS 2D SESSION S. 4272 To advance a policy for managed strategic competition with the People’s Republic of China. IN THE SENATE OF THE UNITED STATES JULY 22, 2020 Mr. RISCH (for himself, Mr. GARDNER, Mr. ROMNEY, and Mr. YOUNG) intro- duced the following bill; which was read twice and referred to the Com- mittee 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 Sec. 1. Short titles. Sec. 2. Table of contents. VerDate Sep 11 2014 04:09 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6211 E:\BILLS\S4272.IS S4272 pbinns on DSKJLVW7X2PROD with BILLS 2 •S 4272 IS 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. Amendments to Higher Education Act of 1965. Sec. 402. Amendment to Foreign Agent Registration Act regarding gifts made to universities. Sec. 403. Designation of a country of national security concern in the Foreign Agent Registration Act. Sec. 404. Ban on Senate-confirmed Department of State officials representing countries of national security concern. Sec. 405. 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. 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. VerDate Sep 11 2014 04:09 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6211 E:\BILLS\S4272.IS S4272 pbinns on DSKJLVW7X2PROD with BILLS 3 •S 4272 IS 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 Technology 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. TITLE VII—FOSTERING COOPERATION BETWEEN THE UNITED STATES AND THE PEOPLE’S REPUBLIC OF CHINA Sec. 701. Sense of Congress regarding United States-People’s Republic of China cooperation on conservation and a healthy environment. Sec. 702. Strategy on cooperation on wildlife and related trafficking. Sec. 703. Statement of policy regarding universal implementation of United Nations sanctions on North Korea. Sec. 704. Government Accountability Office report on United States-PRC tech- nical research cooperation. Sec. 705. Findings on strategic stability and arms control. Sec. 706. Cooperation on a strategic nuclear dialogue. Sec. 707. 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 VerDate Sep 11 2014 04:09 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4272.IS S4272 pbinns on DSKJLVW7X2PROD with BILLS 4 •S 4272 IS (B) an owned or controlled subsidiary of 1 an enterprise meeting the requirements under 2 subparagraph (A). 3 (3) PEOPLE’S LIBERATION ARMY; PLA.—The 4 terms ‘‘People’s Liberation Army’’ and ‘‘PLA’’ mean 5 the armed forces of the People’s Republic of China. 6 (4) PRC; CHINA.—The terms ‘‘PRC’’ and 7 ‘‘China’’ mean the People’s Republic of China. 8 TITLE I—A COMPREHENSIVE 9 CHINA POLICY 10 SEC. 101. FINDINGS. 11 Congress makes the following findings: 12 (1) The People’s Republic of China has in- 13 creased its political, diplomatic, economic, military, 14 technological, and ideological power to become a 15 strategic, near-peer, global competitor of the United 16 States. The policies increasingly pursued by the 17 PRC in each of these domains are contrary to the 18 interests and values of the United States, its part- 19 ners, and much of the rest of the world. 20 (2) The current competition between the United 21 States and the PRC— 22 (A) is taking place over the future char- 23 acter of the international order; 24 VerDate Sep 11 2014 20:57 Aug 11, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4272.IS S4272 pbinns on DSKJLVW7X2PROD with BILLS 5 •S 4272 IS (B) will shape the rules, norms, and insti- 1 tutions that govern relations among states in 2 the coming decades; 3 (C) will determine the ability of the United 4 States to secure its national interests; and 5 (D) will determine future levels of peace, 6 prosperity, and freedom for the United States 7 and the international community in the coming 8 decades. 9 (3) After normalizing diplomatic relations with 10 the PRC in 1979, the United States actively worked 11 to advance the PRC’s economic and social develop- 12 ment to ensure that it participated in, and benefitted 13 from, the free and open international order. The 14 United States pursued these goals and contributed 15 to the welfare of the Chinese people by— 16 (A) increasing the PRC’s trade relations 17 and access to global capital markets; 18 (B) promoting the PRC’s accession to the 19 World Trade Organization; 20 (C) providing development finance and 21 technical assistance; 22 (D) promoting research collaboration; 23 (E) educating the PRC’s top students; 24 VerDate Sep 11 2014 04:09 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4272.IS S4272 pbinns on DSKJLVW7X2PROD with BILLS 6 •S 4272 IS (F) permitting transfers of cutting-edge 1 technologies and scientific knowledge; and 2 (G) providing intelligence and military as- 3 sistance. 4 (4) It is now clear that the PRC has no inten- 5 tion of reforming politically or economically. Instead, 6 it is pursuing state-led, mercantilist economic poli- 7 cies, increasing restrictions on personal freedoms, 8 and implementing an aggressive and assertive for- 9 eign policy. These policies frequently and delib- 10 erately undermine United States interests and are 11 contrary to core United States values and the values 12 of other nations, both in the Indo-Pacific and be- 13 yond. In response to this strategic decision of the 14 PRC, the United States was compelled to reexamine 15 and revise its strategy towards the PRC. 16 (5) The General Secretary of the Chinese Com- 17 munist Party and the President of the People’s Re- 18 public of China, Xi Jinping, has elevated the ‘‘Great 19 Rejuvenation of the Chinese Nation’’ as central to 20 the domestic and foreign policy of the PRC. His pro- 21 gram demands— 22 (A) strong, centralized CCP leadership; 23 (B) concentration of military power; 24 VerDate Sep 11 2014 04:09 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4272.IS S4272 pbinns on DSKJLVW7X2PROD with BILLS 7 •S 4272 IS (C) a strong role for the CCP in the state 1 and the economy; 2 (D) an aggressive foreign policy seeking 3 control over broadly asserted territorial claims; 4 and 5 (E) the denial of any universal values and 6 individual rights that are deemed to threaten 7 the CCP. 8 (6) The PRC views its Leninist model of gov- 9 ernance, ‘‘socialism with Chinese characteristics’’, as 10 superior to, and at odds with, the constitutional 11 models of the United States and other democracies. 12 This approach to governance is lauded by the CCP 13 as essential to securing the PRC’s status as a global 14 leader, and to shaping the future of the world. In a 15 2013 speech, President Xi said, ‘‘We firmly believe 16 that as socialism with Chinese characteristics devel- 17 ops further . . . it is . . . inevitable that the superi- 18 ority of our socialist system will be increasingly ap- 19 parent . . . [and] our country’s road of development 20 will have increasingly greater influence on the 21 world.’’. 22 (7) The PRC’s objectives are to first establish 23 regional hegemony over the Indo-Pacific and then to 24 use that dominant position to propel the PRC to be- 25 VerDate Sep 11 2014 04:09 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4272.IS S4272 pbinns on DSKJLVW7X2PROD with BILLS 8 •S 4272 IS come the ‘‘leading world power’’. The PRC seeks to 1 shape an international order that is conducive to the 2 interests of authoritarian and autocratic regimes. 3 Achieving these objectives requires turning the PRC 4 into a wealthy nation under strict CCP rule by using 5 a strong military and advanced technological capa- 6 bility to pursue the PRC’s objectives, regardless of 7 other countries’ interests. 8 (8) The PRC is reshaping the current inter- 9 national order, which was built upon free and open 10 ideals and principles, by conducting global informa- 11 tion and influence operations, redefining inter- 12 national laws and norms to align with the objectives 13 of the CCP, rejecting the legitimacy of internation- 14 ally recognized human rights, and securing leader- 15 ship positions in multinational organizations to alter 16 their agendas. In December 2018, President Xi sug- 17 gested that the CCP views its ‘‘historic mission’’ as 18 not only to govern China, but also to profoundly in- 19 fluence global governance to benefit the CCP. 20 (9) The PRC is encouraging other countries to 21 follow its model of ‘‘socialism with Chinese charac- 22 teristics’’. During the 19th Party Congress in 2017, 23 President Xi said that the PRC could serve as a 24 model of development for other countries by utilizing 25 VerDate Sep 11 2014 04:09 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4272.IS S4272 pbinns on DSKJLVW7X2PROD with BILLS 9 •S 4272 IS ‘‘Chinese wisdom’’ and a ‘‘Chinese approach to solv- 1 ing problems’’. 2 (10) The PRC is promoting its governance 3 model and attempting to weaken other models of 4 governance by— 5 (A) undermining democratic institutions; 6 (B) subverting financial institutions; 7 (C) coercing businesses to accommodate 8 the policies of the CCP; and 9 (D) using disinformation to disguise the 10 nature of the actions described in subpara- 11 graphs (A) through (C). 12 (11) The PRC is making great strides toward 13 its goal of becoming the global leader in science and 14 technology. In May 2018, President Xi said that for 15 the PRC to reach ‘‘prosperity and rejuvenation’’, it 16 needs to ‘‘endeavor to be a major world center for 17 science and innovation’’. The PRC has invested the 18 equivalent of billions of dollars into education and 19 research and development and established joint sci- 20 entific research centers and science universities. Sci- 21 entists and scholars from the PRC have made nu- 22 merous contributions to a wide array of fields, in- 23 cluding through international partnerships. 24 VerDate Sep 11 2014 04:09 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4272.IS S4272 pbinns on DSKJLVW7X2PROD with BILLS 10 •S 4272 IS (12) The PRC’s drive, however, to become a 1 ‘‘manufacturing and technological superpower’’ and 2 to promote ‘‘innovation with Chinese characteristics’’ 3 is coming at the expense of human rights, national 4 security, and longstanding international rules and 5 norms about economic competition. In particular, 6 the PRC advances its illiberal political and social 7 policies through mass surveillance, social credit sys- 8 tems, and a significant role of the state in internet 9 governance. Through these means, the PRC in- 10 creases direct and indirect government control over 11 its citizens’ everyday lives. Its national strategy of 12 ‘‘civil-military fusion’’ mandates that civil and com- 13 mercial research, which increasingly drives global in- 14 novation, is leveraged to develop new military capa- 15 bilities. 16 (13) The PRC is using legal and illegal means 17 to achieve its objective of becoming a manufacturing 18 and technological superpower. The PRC uses state- 19 directed industrial policies in anticompetitive ways to 20 ensure the dominance of PRC companies. The CCP 21 engages in and encourages actions that actively un- 22 dermine a free and open international market, such 23 as intellectual property theft, forced technology 24 transfers, regulatory and financial subsidies, and 25 VerDate Sep 11 2014 04:09 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S4272.IS S4272 pbinns on DSKJLVW7X2PROD with BILLS 11 •S 4272 IS mandatory CCP access to proprietary data as part 1 of business and commercial agreements between Chi- 2 nese and foreign companies. 3 (14) The policies referred to in paragraph (13) 4 freeze United States and other foreign firms out of 5 the PRC market, while eroding competitio [Text truncated for display. Full text available on Congress.gov.]