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Congress passes bill to boot Chinese companies from stock exchanges if they don’t comply with audits

The Senate approved the legislation earlier this year and now it will head to President Trump.

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U.S. Capitol building in 2003
U.S. Capitol building in 2003
(Stefan Zaklin/Getty Images)
Updated: December 2, 2020 - 11:29pm

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The U.S. House of Representatives approved legislation Wednesday that would boot businesses from China and other foreign countries from U.S. stock exchanges if they failed to give American auditors access to examine financial reports.

The legislation would obligate foreign businesses to give access to U.S. auditors to scrutinize financial reports or be in danger of getting barred from trading on an American stock exchange or over-the-counter market. 

Politico described the bill as an aspect of a larger crackdown regarding Chinese engagement with Wall Street that has been building steam in the U.S. legislature, the White House and the financial industry.

The bill calls for the Securities and Exchange Commission to make rules to block trading the stock of businesses that have barred inspectors for three years in a row, the outlet said.

"Communist China is right now using U.S. stock exchanges to exploit American workers and families—people who put their retirement and college savings in public companies," U.S. Sen. John Kennedy said in a statement. "U.S. policy is letting China flout rules that American companies play by, and it’s dangerous."

During a press conference earlier on Wednesday, Chinese Foreign Ministry spokesperson Hua Chunying expressed opposition to the U.S. bill, stating that it demonstrates “the United States applies discriminatory policies to Chinese companies and launches political oppression against them."

“We firmly oppose politicizing securities regulation. We hope the U.S. side can provide a fair, just and non-discriminatory environment for foreign companies to invest and operate in the U.S., instead of trying to set up various barriers,” Hua said.