The Senate passed a bill Wednesday that could keep many Chinese companies from listing their shares on U.S. exchanges or raising money from U.S. investors in other manners.
The bill, sponsored by Sen. John Kennedy (R-Louisiana), would require companies to prove that they are not owned or controlled by a foreign government.
Foreign companies also would have to undergo an audit that can be reviewed by the Public Company Accounting Oversight Board, the nonprofit body that oversees audits of all U.S. companies that raise money in public markets.
The bill applies to all foreign companies, but senators say it mainly targets China. Sens. Chris Van Hollen (D-Maryland) and Kevin Cramer (R-North Dakota) co-sponsored the measure.
“The Chinese Communist Party cheats, and the Holding Foreign Companies Accountable Act would stop them from cheating on U.S. stock exchanges,” Kennedy wrote on Twitter. “We can’t let foreign threats to Americans’ retirement funds take root in our exchanges.”
It’s very likely the bill will become law, as House members on both sides of the aisle are eager to prove their anti-China bona fides. And President Trump has been waging economic war with China for quite some time.
White House economic adviser Larry Kudlow told Fox Business Network on Tuesday that “we have to” push for more accountability from Chinese companies listed in U.S. markets.
“We have to for investor protection, and we have to for national security,” he said.