Section 1 Short title
This Act may be cited as the “Countering China Economic Coercion Act”.
Countering China Economic Coercion Act
A BILL
To establish an interagency task force to respond to People’s Republic of China coercive economic measures, and for other purposes.
Sec. 2 Findings
Congress finds the following:
The Government of the People’s Republic of China (PRC) has used coercive economic measures against governments, businesses, organizations, other entities, and individuals to punish them for acting in ways the Government of the PRC sees as challenging PRC interests, and to pressure or otherwise influence them to offer policy concessions to the PRC.
In an apparent effort to provide itself more plausible deniability and greater policy flexibility, the PRC often does not formally link a foreign policy dispute or grievance to the coercive measure it uses, opting for informal or extralegal measures rather than formal, published financial sanctions, trade controls, or investment restrictions.
The PRC has also increasingly sought to formalize some of its coercive economic measures through laws and measures that include strengthening its export control regime through the enactment of a new Export Control Law and creation of an Unreliable Entities List.
In 2010, the PRC halted shipments of rare earth elements to Japan during a standoff over a clash between the Japan Coast Guard and a Chinese fishing vessel in disputed waters in the East China Sea.
The PRC targeted Norway after an independent group awarded the 2010 Nobel Peace Prize to imprisoned Chinese dissident Liu Xiaobo. In addition to freezing diplomatic relations and halting negotiations over a possible trade deal, the PRC imposed sanitary and phytosanitary (SPS) measures to restrict Norwegian salmon exports to China. Salmon exports to China resumed in 2016 only after Norway pledged not to “support any actions that undermine” China’s core interests and stated that its own actions had harmed “mutual trust”.
In 2012, the PRC blocked banana imports from the Philippines on the pretext of SPS issues and warned Chinese tourists against visiting the Philippines in response to a standoff over disputed Scarborough Shoal in the South China Sea.
Following the election of Taiwan President Tsai Ing-wen in 2016, the PRC responded to Tsai’s unwillingness to explicitly endorse the terms of the 1992 Consensus by curbing the number of mainland tourists and students allowed to travel to Taiwan.
In 2016, the PRC retaliated against Mongolia for hosting His Holiness the 14th Dalai Lama by raising fees on commodity imports from Mongolia, creating delays at a major border crossing, and canceling negotiations over a loan to the Mongolian government.
Following South Korea’s 2016 decision to join the United States in deploying a United States missile defense system to defend against North Korea’s missile threat, the PRC took the following actions that is estimated to have cost South Korea $7.5 billion dollars in losses in 2017 alone:
Restricted South Korean entertainment and other cultural exports from entering China.
Banned the sale of certain South Korea household products, including cosmetics, high-tech toilet seats, air purifiers, and food.
Restricted tourism between the two countries by ordering travel agencies not to provide South Korean tour packages and by rejecting Korean airlines’ applications to increase charter flights between the two countries.
Targeted the China business of Lotte, a South Korean conglomerate, by suspending new factories, launching cyberattacks against Lotte’s website, and closing significant numbers of Lotte Mart stores in China for alleged safety violations.
After the Government of Australia called for an independent inquiry into the origins of the SARS–CoV–2 virus in 2020, the PRC retaliated by imposing tariffs on Australian wine and barley exports, placing restrictions on other commodities, and threatening to encourage Chinese students to boycott Australian universities.
Sec. 3 Sense of Congress
It is the sense of Congress that—
the People’s Republic of China’s (PRC) increasing use of economic coercion against foreign governments, companies, organizations, other entities, and individuals requires that the United States better understand these measures in order to devise a comprehensive, effective, and multilateral response;
the private sector is a crucial partner in helping the United States Government understand the PRC’s coercive economic measures and hold the PRC accountable, and that additional business transparency would help the United States Government and private sector stakeholders conduct early assessments of potential pressure points and vulnerabilities; and
PRC coercive economic measures creates pressures for the private sector to behave in ways antithetical to United States national interests and competitiveness.
Sec. 4 Interagency task force
Establishment— Not later than 180 days after the date of the enactment of this Act, the President shall establish an interagency task force to be known as the “Countering Economic Coercion Task Force” (referred to in this section as the “Task Force”).
Duties—
In general— The Task Force shall—
oversee the development and implementation of an integrated United States Government strategy to respond to People’s Republic of China (PRC) coercive economic measures, which shall include—
systematically monitoring and evaluating—
the costs of such measures on United States businesses and overall United States economic performance;
instances in which such measures taken against a non-PRC entity has benefitted United States parties; and
the impacts such measures have had on United States national interests; and
facilitating coordination among Federal departments and agencies when responding to such measures as well as proactively deterring such economic coercion;
consult with United States allies and partners on the feasibility and desirability of collectively identifying, assessing, and responding to PRC coercive economic measures, as well as actions that could be taken to expand coordination with the goal of ensuring a consistent, coherent, and collective response to such measures and establishing long-term deterrence to such measures;
effectively engage the United States private sector, particularly sectors, groups, or other entities that are susceptible to such PRC coercive economic measures, on concerns related to such measures; and
develop and implement a process for regularly sharing relevant information, including classified information to the extent appropriate and practicable, on such PRC coercive economic measures with United States allies, partners, and the private sector.
Consultation— In carrying out its duties under this subsection, the Task Force should regularly consult, to the extent necessary and appropriate, with the following:
Relevant stakeholders in the private sector.
Federal departments and agencies that are not represented on the Task Force.
United States allies and partners.
Membership— The President shall—
appoint the chair of the Task Force from among the staff of the National Security Council;
appoint the vice chair of the Task Force from among the staff of the National Economic Council; and
direct the head of each of the following Federal departments and agencies to appoint personnel at the level of Assistant Secretary or above to participate in the Task Force:
The Department of State.
The Department of Commerce.
The Department of the Treasury.
The Department of Justice.
The Office of the United States Trade Representative.
The Department of Agriculture.
The Office of the Director of National Intelligence and other appropriate elements of the intelligence community (as defined in section 3 of the National Security Act of 1947 (50 U.S.C. 3003)).
The Securities and Exchange Commission.
The United States International Development Finance Corporation.
Any other department or agency designated by the President.
Reports—
Initial report— Not later than one year after the date of the enactment of this Act, the Task Force shall submit to the appropriate congressional committees a report that includes the following elements:
A comprehensive review of the array of economic tools the Government of the People’s Republic of China (PRC) employs or could employ in the future to coerce other governments, non-PRC companies (including United States companies), and multilateral institutions and organizations, including the Government of the PRC’s continued efforts to codify informal practices into its domestic law.
The strategy required by subsection (b)(1)(A).
An interagency definition of PRC coercive economic measures that captures both—
the use of informal or extralegal PRC coercive economic measures; and
the illegitimate use of formal economic tools.
A comprehensive review of the array of economic and diplomatic tools the United States Government employs or could employ to respond to economic coercion against the United States and United States allies and partners.
A list of unilateral or multilateral—
proactive measures to defend or deter against PRC coercive economic measures; and
actions taken in response to the Government of the PRC’s general use of coercive economic measures.
An assessment of areas in which United States allies and partners are vulnerable to PRC coercive economic measures.
A description of gaps in existing resources or capabilities for United States Government departments and agencies to respond effectively to PRC coercive economic measures directed at United States entities and assist United States allies and partners in their responses to PRC coercive economic measures.
Interim reports—
First interim report— Not later than one year after the date on which the report required by paragraph (1) is submitted to the appropriate congressional committees, the Task Force shall submit to the appropriate congressional committees a report that includes the following elements:
Updates to information required by subparagraphs (A) through (G) of paragraph (1).
A description of activities conducted by the Task Force to implement the strategy required by subsection (b)(1)(A).
Second interim report— Not later than one year after the date on which the report required by subparagraph (A) is submitted to the appropriate congressional committees, the Task Force shall submit to the appropriate congressional committees a report that includes an update to the elements required under the report required by subparagraph (A).
Final report— Not later than 30 days after the date on which the report required by paragraph (2)(B) is submitted to the appropriate congressional committees, the Task Force shall submit to the appropriate congressional committees and also make available to the public on the website of the Executive Office of the President a final report that includes the following elements:
An analysis of PRC coercive economic measures and the cost of such coercive measures to United States businesses.
A description of areas of possible particular vulnerability for United States businesses and businesses of United States partners and allies.
Recommendations on how to continue the effort to counter PRC coercive economic measures.
A list of cases made public under subsection (e).
Form—
Initial and interim reports— The reports required by paragraphs (1), (2)(A), and (2)(B) shall be submitted in unclassified form, but may include a classified annex.
Final report— The report required by paragraph (3) shall be submitted in unclassified form, but may include a classified annex.
Publicly available list—
In general— Not later than 120 days after the date of the enactment of this Act, the Task Force shall to the extent practicable make available to the public on the website of the Executive Office of the President a list of cases in the past six months in which the PRC is known to have directed coercive economic measures against a non-PRC entity.
Updates— The list required by paragraph (1) should be updated every 180 days, and shall be managed by the Department of State after the termination of the Task Force under subsection (f).
Sunset—
In general— The Task Force shall terminate at the end of the 60-day period beginning on the date on which the final report required by subsection (d)(3) is submitted to the appropriate congressional committees and made publicly available.
Additional actions— The Task force may use the 60-day period referred to in paragraph (1) for the purposes of concluding its activities, including providing testimony to Congress concerning the final report required by subsection (d)(3).
Sec. 5 Definitions
In this Act:
Appropriate congressional committees— The term “appropriate congressional committees” means—
the Committee on Foreign Affairs of the House of Representatives; and
the Committee on Foreign Relations of the Senate.
Coercive economic measures— The term “coercive economic measures” includes formal or informal restrictions or conditions, such as on trade, investment, development aid, and financial flows, intended to impose economic costs on a non-People’s Republic of China target in order to achieve strategic political objectives, including influence over the policy decisions of a foreign government, company, organization, or individual.