The U.S. House of Representatives has unanimously passed a new measure to allow the delisting of Chinese firms if they don’t comply with U.S. auditing rules, Reuters reports.
Called The Holding Foreign Companies Accountable Act, the measure is a feather in the cap for President Donald Trump before he leaves office, as one more way he can threaten Beijing.
The act will bar securities of foreign companies from being listed on any U.S. exchange if they don’t follow the U.S. Public Accounting Oversight Board’s audits for three years in a row. It ostensibly applies to companies from any country, Reuters writes, but the legislation sponsors intended it to hone in on Chinese giants like Alibaba, tech firm Pinduoduo and PetroChina, an oil company.
The act’s passing follows others targeting Chinese interests that have attained bipartisan support in Congress. Trump’s attacks on Beijing have been persistent over his presidency, but have grown more pronounced as he blamed China from the ascent of the coronavirus on U.S. soil.
The Chinese Embassy in Washington didn’t respond to Reuters for comment, though Chinese foreign ministry spokeswoman Hua Chunying called the act “discriminatory” and said it would have the effect of politically oppressing businesses from China, Reuters writes.
“Instead of setting up layers of barriers, we hope the U.S. can provide a fair and non-discriminatory environment for foreign firms to invest and operate in the U.S.,” Hua told a news conference, according to Reuters.
Chinese firms have been scrambling to launch initial public offerings (IPOs) in the U.S. following the proposal of the rules earlier this year, PYMNTS writes. The value of the numerous IPOs pushed after the proposal in August was over $5 billion, and included real estate company KE Holdings and electronic automobile producer Xpeng.
The value of Chinese IPOs in the U.S. last year was around $4 billion, PYMNTS writes.
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