US passes another law to threaten Chinese firms

By Rahul Vaimal, Associate Editor
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The White House said that American President Donald Trump has signed legislation that will kick Chinese firms off US stock exchanges unless they adhere to US auditing standards, giving Mr. Trump another tool to threaten China before leaving office next month.

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

While it applies to companies from any country, it was intended by the sponsors of the legislation to target Chinese companies listed in the US, such as tech companies Alibaba, Pinduoduo and oil giant PetroChina Co.

The legislation, like many others taking a harder line on Chinese businesses, had passed Congress by large margins earlier this year. Lawmakers, both Democrats and Trump’s fellow Republicans, echo the president’s hard line against China, which became fiercer this year as Trump blamed China for the coronavirus ravaging the United States.

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

Trade blacklist

The United States also added dozens of Chinese companies, including the country’s top chipmaker SMIC and the world’s biggest drone company DJI Technology, to a trade blacklist.

China’s foreign ministry said that the blacklisting is an evidence of US oppression of Chinese companies and that they would continue to take “necessary measures” to protect their rights. Chinese authorities have long been reluctant to let overseas regulators inspect local accounting firms, citing national security concerns.

Ties between the US and China have grown increasingly sour over the past year as the world’s top two economies sparred over China’s handling of the coronavirus outbreak, imposition of a national security law in Hong Kong and rising tensions in the South China Sea.