Senate Passes Bill to Increase Oversight of Chinese Firms on US Exchanges

  • Senate Passes Bill to Increase Oversight of Chinese Firms on US Exchanges

Senate Passes Bill to Increase Oversight of Chinese Firms on US Exchanges

The Senate overwhelmingly approved legislation Wednesday that could lead to Chinese companies such as Alibaba Group Holding Ltd. and Baidu Inc. being barred from listing on US stock exchanges amid increasingly tense relations between the world's two largest economies.

A recent scandal involving Luckin Coffee, China's version of Starbucks, which fabricated millions worth of sales a year ago, provided USA legislators with the impetus to tighten regulation of foreign companies listing in the U.S. which, although it doesn't specifically say so, is targeting Chinese firms.

It also requires companies to certify whether they are under the control of a foreign government.

"The bill is basically biased".

According to a list compiled by the U.S. "They will thus be forced to delist or go private", he said.

In a sign of broad support for the measure, Representative Brad Sherman, a California Democrat on the House Financial Services Committee, introduced a companion bill in support for the measure and cited the case of Luckin Coffee, a US-listen Chinese company that fabricated its sales. The shares of e-commerce major Alibaba fell over 2 per cent.

They would be required to submit to an audit that can be reviewed by the Public Company Accounting Oversight Board, which has been objected to by China.

Mr Trump and officials in his administration argue that China mishandled the coronavirus outbreak in its early stages. The A-share market is thus more inclusive, relaxing requirements on profitability and allowing for dual-class ownership. "All these can be considered the preparations for the return of Chinese companies to the A-share market", he said.

"All Chinese US-listed entities are potentially impacted over the coming years", he said.

Data from Shanghai-based market tracker Wind Info showed that 227 Chinese companies were listed on United States bourses by the end of a year ago. "China is on a glidepath to dominance and is cheating at every turn", Kennedy said in a statement.

The legislation comes as the US-China dispute over the coronavirus pandemic and other issues is intensifying. The subjects of these legislation include the mass internment of Uygurs, cyber-security and Taiwan and the South China sea among others.

"The number of Chinese companies considering public floats in the U.S. will drop in the short term".

"In the past several months, USA politicians proposed to delist Chinese companies from US stock exchanges with different criteria, and cap Americans' exposure to the Chinese market", wrote analysts from China Renaissance.