29.06.2020 | China threatened by US over new legislation aimed at 'hurting' Chinese companies
Source - The Daily Express
This has the potential to trip up businesses and investors at home as Chinese firms move to other countries for capital. The Holding Foreign Companies Accountable Act is the name of the bill and it aims to address the issue that US securities regulators have with Beijing. It’s been an ongoing feud for decades which has seen Beijing refuse to allow audit inspections of their companies.
If it becomes law, Chinese companies will be required to comply with the rules or face being delisted.
This would put US$1.3 trillion of US-listed Chinese firms, including behemoths Alibaba Group and Tencent, at risk of losing access to the world’s largest capital markets.
Policy watchers and investors, however, said domestic businesses and investment funds could become unintended victims if Chinese companies begin to leave the US as a result.
“While it is going to hurt China, is it going to hurt it enough for the government to agree to the changes? That is unclear,” said Anna Ashton, senior director of government affairs at the US-China Business Council.
It is yet “another instance among many [that] our approach against China wasn’t completely thought through”.
On May 20, the bill passed through the US Senate by unanimous vote, however, awaits a further vote in the House of Representatives.
Under the bill, failure to provide information for three straight years would lead to trading bans of the shares.