The U.S. House of Representatives is expected to pass a bill this week that would set a higher threshold for Chinese companies to go public in the United States. Chinese Foreign Ministry spokeswoman Hua Chunying said on Wednesday (Dec. 2) that China firmly opposes the politicization of securities regulation and hopes that the United States will provide a fair, just and non-discriminatory environment for foreign companies to invest and operate in the U.S. “instead of trying to put up layers and layers of obstacles”.
According to some analysts, this statement from China sounds ridiculous to many people. For nearly 20 years, since joining the World Trade Organization in 2001, the Chinese authorities have refused to honor their WTO commitments by opening China’s markets or by erecting heavy tariff and non-tariff barriers and listing barriers that make it difficult for foreign companies to enter or compete fairly in the Chinese market.
This approach by the Chinese authorities was one of the main factors behind President Trump’s decision to launch a trade war against China two years ago. The Trump administration has stated that the United States cannot continue to allow China to engage in such unfair trade practices in a way that pits the United States against China’s interests.
China’s other major trading partners have the same complaints and criticisms about China, except that countries like the European Union believe that China should be forced to fulfill its commitment to join the World Trade Organization by other means than a trade war.
The House of Representatives is considering and is expected to pass a bill that would prevent Chinese companies from listing on U.S. stock markets if they do not adopt U.S. accounting and auditing standards, congressional aides said Tuesday. The House of Representatives is scheduled to vote on the Holding Foreign Companies Accountable Act on Wednesday evening, EDT.
The bill would prohibit the listing of securities of foreign companies on any U.S. securities exchange if they fail to pass an audit by the U.S. Public Accounting Oversight Board for three consecutive years.
Reuters reports that some congressional aides say the bill has bipartisan support from both Republicans and Democrats in Congress; bills that take a hard line on Chinese companies and trade practices typically receive a majority of support from members of Congress. The current bill, co-sponsored by Republican Senator Kennedy and Democratic Senator Horan, passed the Senate unanimously in May of this year.
After the House passes the bill, it goes to the White House, where President Trump will either veto it or sign it into law. Trump, a strong critic of China’s treatment of foreign companies, is expected to sign the bill after it is passed by Congress, a person with knowledge of the matter said, Reuters reported.
The bill would also require publicly traded companies to disclose whether they are owned or controlled by foreign governments. The bill would give Chinese companies such as Alibaba, China Telecom and China Mobile three years to comply with U.S. accounting rules, or they would be delisted from the U.S. stock market.
Chinese Foreign Ministry spokeswoman Hua Chunying said Tuesday: “This issue shows once again that the United States has adopted a discriminatory policy against Chinese companies and is a political suppression of Chinese companies.”
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