WASHINGTON: President Donald Trump continued his anti-China policy just days before leaving office when he signed a bill on Friday that would kick Chinese companies off U.S. stock exchanges unless they abide by auditing standard.
According to Reuters, apparently, the law seems to target companies from any country but it is specifically intended to target Chinese companies listed in the United States, like Alibaba, Pinduoduo and PetroChina Co Ltd.
The president has been criticizing China for “unfair trading practices”, and slapped new tariffs on imports from Beijing. His verbal outrage became harsher as he blamed Beijing for the global coronavirus pandemic. This legislation, like many others taking a harder line on Chinese businesses, had passed Congress by large margins earlier this year.
The new law would also require public companies to disclose whether they are owned or controlled by a foreign government.
Chinese authorities have long been reluctant to let overseas regulators inspect local accounting firms, citing national security concerns.
Meanwhile, Chinese officials have called the measure as a discriminatory policy that politically oppresses firms.
Foreign Ministry spokeswoman Hua Chunying said that Beijing was “against politicizing securities regulation” and urged cooperation to protect investors’ rights.
She said President Trump’s new measure would undermine foreign investors’ confidence in the U.S. capital markets and ruin its capital markets’ global standing and hurt U.S. interests.
Bloomberg adds: On the other hand, Republican Senator John Kennedy from Louisiana, said in a statement that the U.S. policy was letting China flout rules that American companies play by.
The new law marks a watershed moment in a long-running dispute over China’s refusal to let the Public Company Accounting Oversight Board examine audits of firms whose shares trade in the U.S. The requirement for the inspections by the agency, which was created in the wake of the Enron Corp. accounting scandal, is meant to prevent fraud and wrongdoing that could wipe out shareholders.
In addition to requiring companies to allow U.S. inspectors to review their financial audits, the measure introduced by Kennedy and Senator Chris Van Hollen, a Maryland Democrat, requires firms to disclose whether they are under government control.
Van Hollen said the delisting bill would protect people who “have been cheated out of their money after investing in seemingly legitimate Chinese companies that are not held to the same standards” as other public companies. “This bill rights that wrong, ensuring that all companies on the U.S. exchanges abide by the same rules,” he said.
