US Senate tries to block Chinese firms from US capital markets

The United States Senate passed legislation on Wednesday that could prevent some Chinese companies from listing their shares on US exchanges unless they follow standards for US audits and regulations.

The measure, sponsored by Republican Senator John Kennedy and Democratic Senator Chris Van Hollen, passed by unanimous consent. However, it must pass the House of Representatives and be signed by President Donald Trump to become law.

The Holding Foreign Companies Accountable Act bars securities of any company from being listed on any US securities exchange if the company has failed to comply with the US Public Company Accounting Oversight Board’s audits for three years in a row.

The measure also would require public companies to disclose whether they are owned or controlled by a foreign government.

The bill is written to apply to all foreign companies, but the Reuters News agency is reporting that it is targeted at China, and follows intense criticism of Beijing by Trump, a Republican – criticism that has been echoed by Republican and Democratic lawmakers alike.

Trump and other officials in his administration insist that China mishandled the novel coronavirus during the early weeks of an outbreak that has spread into a global pandemic that has killed more than 320,000 people and cratered global economies.

Beijing denies such allegations.

“There are plenty of markets all over the world open to cheaters, but America can’t afford to be one of them. China is on a glidepath to dominance and is cheating at every turn,” Kennedy said in a statement.

“For too long,” said Van Hollen, “Chinese companies have disregarded US reporting standards, misleading our investors.”