March 2, 2020 - Issue: Vol. 166, No. 41 — Daily Edition116th Congress (2019 - 2020) - 2nd Session

[Pages H1429-H1430]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             ENSURING CHINESE DEBT TRANSPARENCY ACT OF 2020

  Mr. SAN NICOLAS. Mr. Speaker, I move to suspend the rules and pass 
the bill (H.R. 5932) to ensure greater transparency about the terms and 
conditions of financing provided by China to member states of the 
international financial institutions, as amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 5932

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Ensuring Chinese Debt 
     Transparency Act of 2020''.

     SEC. 2. ENSURING CHINESE DEBT TRANSPARENCY.

       (a) United States Policy at the International Financial 
     Institutions.--The Secretary of the Treasury shall instruct 
     the United States Executive Director at each international 
     financial institution (as defined in section 1701(c)(2) of 
     the International Financial Institutions Act) that it is the 
     policy of the United States to use the voice and vote of the 
     United States at the respective institution to seek to secure 
     greater transparency with respect to the terms and conditions 
     of financing provided by the government of the People's 
     Republic of China to any member state of the respective 
     institution that is a recipient of financing from the 
     institution, consistent with the rules and principles of the 
     Paris Club.
       (b) Report Required.--The Chairman of the National Advisory 
     Council on International Monetary and Financial Policies 
     shall include in the annual report required by section 1701 
     of the International Financial Institutions Act--
       (1) a description of progress made toward advancing the 
     policy described in subsection (a) of this section; and
       (2) a discussion of financing provided by entities owned or 
     controlled by the government of the People's Republic of 
     China to the member states of international financial 
     institutions that receive financing from the international 
     financial institutions, including any efforts or 
     recommendations by the Chairman to seek greater transparency 
     with respect to the former financing.
       (c) Sunset.--Subsections (a) and (b) of this section shall 
     have no force or effect after the earlier of--
       (1) the date that is 7 years after the date of the 
     enactment of this Act; or
       (2) 30 days after the date that the Secretary reports to 
     the Committee on Financial Services of the House of 
     Representatives and the Committee on Foreign Relations of the 
     Senate that the People's Republic of China is in substantial 
     compliance with the rules and principles of the Paris Club.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from 
Guam (Mr. San Nicolas) and the gentleman from Arkansas (Mr. Hill) each 
will control 20 minutes.
  The Chair recognizes the gentleman from Guam.


                             General Leave

  Mr. SAN NICOLAS. Mr. Speaker, I ask unanimous consent that all 
Members may have 5 legislative days within which to revise and extend 
their remarks on this legislation and to insert extraneous material 
thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Guam?
  There was no objection.
  Mr. SAN NICOLAS. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I very much support H.R. 5932, the Ensuring Chinese Debt 
Transparency Act of 2020, which seeks to reinforce U.S. policy at the 
World Bank, the International Monetary Fund, and the regional 
development banks to press for disclosure of the amount and terms of 
China's bilateral lending operations abroad.
  According to the International Monetary Fund, opaque loans from 
China's many lending institutions, especially those associated with 
China's Belt and Road Initiative are not only putting many emerging 
market and developing countries at risk of debt distress, but also 
complicate the IMF's ability to

[[Page H1430]]

monitor domestic, regional, and global financial risks associated with 
this debt.
  While the ability to accurately identify the amount and terms of 
Chinese lending in developing countries is essential to better debt 
risk management, surveillance work, and asset risk pricing, it is 
important to understand that greater transparency itself is only a 
starting point.
  In order to help low-income, emerging market, and fragile and 
conflict-affected states meet development goals while maintaining debt 
sustainability, the United States should be increasing its commitments 
to the multilateral development banks to offer these countries better 
options than China does, to provide additional financing on 
concessional terms of which China does very little.
  Let me add that one argument for China's ongoing borrowing from the 
World Bank is that it allows a broader public global good to be 
imported into the Chinese system, things like international 
environmental and societal standards, high standards of transparency 
and open procurement processes, strong governance programs, and respect 
for the importance of global economic cooperation.
  However, there is very little evidence that World Bank lending to 
China has had any such effect on Chinese behavior with respect to its 
own development financing abroad, and this is a serious problem.
  H.R. 5932 helps us to address this problem. Mr. Speaker, I reserve 
the balance of my time.
  Mr. HILL of Arkansas. Mr. Speaker, I yield myself such time as I may 
consume.
  Mr. Speaker, I rise today in support of the legislation, H.R. 5932, 
which I introduced recently, and I was fortunate to have the Speaker's 
assistance on this, my friend from Missouri, Mr. Cleaver, in designing 
this legislation.
  It is just one issue that relates to a complex set of issues around 
China's access to the World Bank and China's engagement in the world as 
a creditor.
  But H.R. 5932, Ensuring Chinese Debt Transparency Act, would require 
the Secretary of the Treasury to instruct the U.S. executive director 
at each of the international financial institutions that it is U.S. 
policy to ensure greater transparency in Chinese Government lending to 
countries that are also beneficiaries of those international financial 
institutions.
  Specifically, this bill would require the Secretary to report 
annually to Congress on the progress in advancing this policy, and 
secondly, lending to foreign countries by entities owned or controlled 
by the Chinese Government.
  As we know, the international financial institutions include the 
International Monetary Fund, the IMF, the World Bank, and the regional 
development banks. The IMF lends to foreign countries in order to 
resolve balance-of-payments crises, while the development banks finance 
projects with the long-term aim of alleviating poverty.
  With the growth of China's global presence, there is concern that the 
developing nations that borrow from Beijing will become overburdened, 
forcing them to be rescued by the IMF or complicating the development 
banks' ability to properly underwrite loans for new projects.
  Specifically, the Belt and Road Initiative is of significant concern. 
The Chinese Belt and Road Initiative is a global development strategy 
adopted by the Chinese Government in 2013. It involves infrastructure 
development and investments in nearly 70 countries and international 
organizations in Asia, Europe, and in Africa.
  To date, according to Morgan Stanley's estimates, the Belt and Road 
Initiative has committed more than $200 billion with estimates that 
China may invest up to $1.3 trillion by 2027. Other estimates have the 
current number closer to $400 billion. Either number dwarfs the post-
World War II Marshall Plan, which, measured in today's dollars, would 
be $130 billion.
  However, unlike the Marshall Plan, Belt and Road Initiative financing 
can make underwriting assistance difficult or even unworkable for 
developing countries as the initiative has opaque financing terms. 
China simply doesn't report on this lending in any systematic way, and 
there is no evidence that China is adopting international transparency 
standards from the multilateral development banks or engages in best 
practices to prevent debt traps, corruption, or poor construction 
outcomes.
  China needs to be held accountable to ensure that it is not taking 
advantage of vulnerable economies in these countries. In my view, the 
World Bank and the IMF must know the terms and conditions of opaque 
Chinese lending, what those entail, when they are considering a 
sovereign loan to a country that goes to the World Bank or the IMF for 
assistance.
  On a trip to the Republic of Congo back in 2017, I witnessed this 
firsthand when I saw the burdens and impact of Chinese lending on that 
oil-based economy. Now, the Republic of Congo finds itself in the hands 
of the IMF in negotiating with them for a payments loan.
  This legislation will contribute to that overall accountability by 
seeking to secure greater transparency consistent with the principles 
of the Paris Club, a group of global creditors, including the United 
States, who find workable solutions for nations currently in debt.
  In theory, many of the underlying policies in this legislation should 
already be practiced; however, due to political insensitivities, 
inertia, and other concerns, that doesn't always happen. This 
legislation will underscore the United States' leadership and help 
develop a global multilateral effort to ensure more scrutiny for China. 
As China becomes a major creditor nation, it should be held to a high 
standard.
  Mr. Speaker, I reserve the balance of my time.
  Mr. SAN NICOLAS. Mr. Speaker, I am prepared to close. I reserve the 
balance of my time.
  Mr. HILL of Arkansas. Mr. Speaker, I yield myself the balance of my 
time.
  In conclusion, I would say that this is the way to build a 
partnership between the multilateral countries of the world that 
support the World Bank and the IMF and have China have more scrutiny on 
their opaque terms and conditions, which in turn should allow better 
outcomes for our developing nations around the world, less chance of 
falling into a debt trap.
  Mr. Speaker, I urge my colleagues to support this legislation. I 
thank my friend from Missouri for his assistance and my friend from 
Guam for managing the bill. I yield back the balance of my time.
  Mr. SAN NICOLAS. Mr. Speaker, I yield myself the balance of my time.
  The fact that China continues to borrow from the World Bank affords 
us an opportunity to expect much more from China in return, including 
an insistence on transparency in China's bilateral financing 
operations, greater adherence by China to anticorruption and export 
credit international standards, and finding coordinated and sustainable 
solutions to countries experiencing balance of payment difficulties.
  I urge my colleagues to support this legislation, which underscores 
that far greater transparency is the first essential step China must 
take if it is to be a responsible member of the global financial 
community.
  Mr. Speaker, I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from Guam (Mr. San Nicolas) that the House suspend the rules 
and pass the bill, H.R. 5932, as amended.
  The question was taken.
  The SPEAKER pro tempore. In the opinion of the Chair, two-thirds 
being in the affirmative, the ayes have it.
  Mr. HILL of Arkansas. Mr. Speaker, on that I demand the yeas and 
nays.
  The yeas and nays were ordered.
  The SPEAKER pro tempore. Pursuant to clause 8 of rule XX, further 
proceedings on this motion will be postponed.

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