China Exchange Rate Transparency Act of 2025
Officially: “China Exchange Rate Transparency Act of 2025” Read the full text
What it does
Read it in plain language
1Short title
This section would give the Act its official short name, the China Exchange Rate Transparency Act of 2023.
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1. Short title This Act may be cited as the China Exchange Rate Transparency Act of 2023 .
2Findings
This section lays out findings by Congress on China's exchange rate practices. It states that under Article IV of the International Monetary Fund's Articles of Agreement, China has committed to orderly exchange rate arrangements, to avoiding exchange rate manipulation, and to cooperating with the IMF so it can firmly monitor China's exchange rate policies, and that under Article VIII the IMF may require China to report data on its gold and foreign exchange holdings, including holdings by non-official Chinese agencies. It cites the Department of the Treasury's November 2022 report, which concluded that China provides very limited transparency about key features of its exchange rate mechanism, including the objectives of its exchange rate management regime and its activity in the offshore RMB market, and that this lack of transparency, combined with China's use of a wide array of tools, makes it hard for Treasury to judge whether China's official actions are designed to affect the exchange rate. It also notes that the same report found China's failure to publish its foreign exchange interventions, together with its broader lack of transparency about key features of its exchange rate mechanism, makes it an outlier among major economies and justifies close monitoring by Treasury.
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2. Findings The Congress finds as follows: (1) Under Article IV of the Articles of Agreement of the International Monetary Fund (IMF), the People’s Republic of China has committed to orderly exchange rate arrangements, the avoidance of exchange rate manipulation, and cooperation with the IMF to ensure firm surveillance of the exchange rate policies of the People’s Republic of China. Pursuant to Article VIII of the Articles of Agreement of the IMF, the IMF may require the People’s Republic of China to furnish data on gold and foreign exchange holdings, including assets held by non-official agencies of the People’s Republic of China. (2) In its November 2022 report, entitled Macroeconomic and Foreign Exchange Policies of Major Trading Partners of the United States , the Department of the Treasury concluded, China provides very limited transparency regarding key features of its exchange rate mechanism, including the policy objectives of its exchange rate management regime and its activities in the offshore RMB market. . The Department continued: China’s lack of transparency and use of a wide array of tools complicate Treasury’s ability to assess the degree to which official actions are designed to impact the exchange rate. . (3) In that report, the Department further noted that China’s failure to publish foreign exchange intervention and broader lack of transparency around key features of its exchange rate mechanism make it an outlier among major economies and warrants Treasury’s close monitoring. .
3Advocacy for increased exchange rate transparency from China
This section would require the Secretary of the Treasury to instruct the United States Executive Director at the International Monetary Fund to use the United States' voice and vote to advocate for three things. First, increased transparency from China and enhanced multilateral and bilateral surveillance by the IMF of China's exchange rate arrangements, including any indirect foreign exchange market intervention carried out through Chinese financial institutions or state-owned enterprises. Second, when the IMF holds Article IV consultations with China, the inclusion of any significant ways China's exchange rate policies diverge from those of other issuers of currencies used to determine the value of Special Drawing Rights. Third, during IMF governance reviews, stronger consideration by IMF members and management of China's performance as a responsible stakeholder in the international monetary system when they evaluate China's quota and voting shares at the IMF.
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3. Advocacy for increased exchange rate transparency from China The Secretary of the Treasury shall instruct the United States Executive Director at the International Monetary Fund (in this Act referred to as the IMF ) to use the voice and vote of the United States to advocate for— (1) increased transparency from the People’s Republic of China, and enhanced multilateral and bilateral surveillance by the IMF, with respect to the exchange rate arrangements of the People’s Republic of China, including any indirect foreign exchange market intervention through Chinese financial institutions or state-owned enterprises; (2) in connection with consultations with the People’s Republic of China under Article IV of the Articles of Agreement of the IMF, the inclusion of any significant divergences by the People’s Republic of China from the exchange rate policies of other issuers of currencies used in determining the value of Special Drawing Rights; and (3) during governance reviews of the IMF, stronger consideration by IMF members and management of the performance of China as a responsible stakeholder in the international monetary system when evaluating quota and voting shares at the IMF.
4Sunset
This section would end the Act's legal force and effect 30 days after whichever of two dates comes first. The first is the date the United States Governor of the IMF reports to Congress that China is both in substantial compliance with its obligations under the IMF's Articles of Agreement regarding orderly exchange rate arrangements, and has adopted exchange rate policies and practices consistent with those of other issuers of currencies used to determine the value of Special Drawing Rights. The second is the date that is 7 years after the Act is enacted.
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4. Sunset This Act shall have no force or effect on or after the date that is 30 days after the earlier of— (1) the date that the United States Governor of the IMF reports to the Congress that the People’s Republic of China— (A) is in substantial compliance with obligations of the People’s Republic of China under the Articles of Agreement of the IMF regarding orderly exchange rate arrangements; and (B) has undertaken exchange rate policies and practices consistent with those of other issuers of currencies used in determining the value of Special Drawing Rights; and (2) the date that is 7 years after the date of the enactment of this Act.
Where it is
In the House.