The commission also advised Congress to take steps to ensure the security of medicines and pharmaceutical ingredients imported from China, warning that growing U.S. reliance on these imports poses “economic and national security risks.”
The 12-person commission, made up of appointees named by the Democratic and Republican leaders of Congress, has helped spark legislative action through its past recommendations, including bipartisan bills introduced this year that would revise trade, finance, and tax provisions in relation to China and require federal agencies to make regular reports to Congress on China’s actions, including its “influence and propaganda activities in the United States.”
The group began raising alarms about Chinese tech company Huawei in its 2011 report, and worked closely with Congress to implement bans on Huawei telecom equipment in the U.S., said Leslie Reagan, a spokeswoman for the commission.
The group this year took a dark view of U.S.-China relations, saying 2019 “looks set to conclude with the clash over China’s trade-distorting practices mostly unresolved and the broader political, technological and security differences between the two sides solidifying into prolonged strategic competition.”
The report bashed China’s “repressive” policies at home, saying they motivated the commission to stop referring to Xi Jinping as China’s president in this year’s report.
“The commission made the decision to start referring to Xi Jinping using the title by which he derives his authority: General Secretary of the Chinese Communist Party,” the report says. “China is not a democracy, and its citizens have no right to vote, assemble or speak freely. Giving General Secretary Xi the unearned title of ‘President’ lends a veneer of democratic legitimacy to the CCP and Xi’s authoritarian rule.”
China’s embassy in the U.S. didn’t respond to a request for comment.
The commission is chaired by Carolyn Bartholomew, a longtime staff member for House Speaker Nancy Pelosi (D-Calif.), who also chaired the commission in 2007, 2009 and 2017. The vice chair of the commission is Robin Cleveland, a former staff member for Senate Majority Leader Mitch McConnell (R-Ky.).
The report pays close attention to the worsening situation in Hong Kong, where pro-democracy protesters have spent more than five months staging mass demonstrations, accusing Beijing of encroaching on the semiautonomous territory’s freedoms. Chaotic battles this week between riot police and protesters have raised fears of major intervention by the Chinese government.
Under a 1992 U.S. law, Hong Kong enjoys a more favorable trading status with the United States than mainland China does. The commission recommended Congress enact legislation stating the United States will suspend this special trading status if China deploys the People’s Liberation Army or the mainland China police force “to engage in armed intervention in Hong Kong.”
The report also advised Congress to amend the 1992 law to require the State Department to evaluate the state of Hong Kong’s autonomy each year, using specific benchmarks.
The recommendations comes at tense time in the U.S.-China trade talks, with President Trump saying the countries might not reach a deal this year to ease a conflict that has prompted both sides to levy large tariffs on each other’s imports.
Congress’s current appetite to pass legislation on Hong Kong is unclear. The House last month passed the Hong Kong Human Rights and Democracy Act, which would impose sanctions on those responsible for human rights violations in Hong Kong. A companion bill had stalled in the Senate until Thursday, when sponsors Marco Rubio (R-Fla.). and Jim Risch (R-Idaho) initiated a process to pass the bill by unanimous consent, which could lead to quick approval if no senators object.
A commission recommendation to restrict listings on U.S. stock exchanges reflects growing concern that Chinese companies haven’t been disclosing the same level of financial information to investors compared with other companies. The commission said Congress should preclude Chinese companies from issuing securities on U.S. exchanges if the companies’ disclosure procedures “are not consistent with best practices on U.S. and European exchanges,” among other deficiencies.
The commission also warned that U.S. reliance on pharmaceutical ingredients supplied by China could present a risk, should Beijing opt to use this “as an economic weapon and cut supplies of critical drugs.”
The report described China as suffering from weak regulation and safety standards that have resulted in “significant drug safety scandals.”
To protect the U.S. supply of medicines, the report recommends steps including requiring Medicare, Medicaid and other federal health-care programs to purchase pharmaceuticals only from facilities certified by the Food and Drug Administration that actively monitor the quality of the ingredients they use to manufacture medication.