The US House of Representatives has passed a law to kick Chinese companies off US stock exchanges if they do not fully comply with the country’s auditing rules, giving President Donald Trump one more tool to threaten Beijing with before leaving office.
The measure passed the House by unanimous voice vote, after passing the Senate unanimously in May, sending it to Trump, who the White House said is expected to sign it into law. While is applies to companies from any country, the legislation’s sponsors intended it to target Chinese companies listed in the United States, such as Alibaba, tech firm Pinduoduo and oil giant PetroChina.
In addition to requiring companies to allow US inspectors to review their financial audits, the measure – introduced by John Kennedy, a Louisiana Republican and Senator Chris Van Hollen, a Maryland Democrat – requires firms to disclose whether they are under government control.
Measures taking a harder line against Chinese business and trade practices generally pass Congress with large margins. Both Democrats and Trump’s fellow Republicans echo the president’s hard line against Beijing, which became fiercer this year as Trump blamed China for the coronavirus ravaging the US.
Van Hollen said in a statement that US investors “have been cheated out of their money after investing in seemingly legitimate Chinese companies that are not held to the same standards as other publicly listed companies”.
Kennedy said China was using US exchanges to “exploit” Americans. “The House joined the Senate in rejecting a toxic status quo,” he said in a statement.
The American Securities Association praised passage of the bill saying it was necessary to protect Americans from “fraudulent companies controlled by the Chinese Communist Party.”
Lillian Jijingi with Agency Reports