The senate of the United States has raised a red flag by approving legislation that Chinese companies are barred from listing on U.S. stock exchanges. The legislation was raised over the billions of dollars that were coming into some of China’s largest corporations. The bill was introduced by John Kennedy, a Republican senator from Louisiana and a Democrat from Maryland, Chris Van Hollen. According to Kennedy “I do not want to get into a cold war”, before adding that China simply has to play by the rules. Under the legislation, Chinese companies are prevented from listing their shares on U.S. exchanges unless they are willing to follow the laid out standards for U.S. regulations and audits. The legislation however still has to be signed by the president of the United States before it can become a law. The law could make sure that companies owned by the Chinese like Alibaba are barred from listing.
If the public company accounting is not able to provide an audit of the company for three years consecutively with the aim of proving that the company is not under the control of any foreign government, the company will be banned from exchanges. Van Hollen said, “publicly listed companies should all be held to the same standards, and this bill makes common-sense changes to level the playing field and give investors the transparency they need to make informed decisions”. Kennedy also said “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 glide path to dominance and is cheating at every turn”. On Tuesday, senator Kennedy told fox business that the legislation will apply to U.S. exchanges like the New York Stock Exchange. The U.S. and the Chinese have been on odds concerning these issues for a long time. Rubik said, “ if Chinese companies want access to the U.S. capital markets, they must comply with American laws and regulations for financial transparency and accountability”.
