US Senate, on Wednesday, overwhelmingly approved a bill, which could lead to Chinese companies such as Alibaba Group Holding Ltd. and Baidu Inc. being barred from listing on U.S. stock exchanges.
Tense relations between the two countries
The relationship between China and the US has been tense, ever since the onset of the COVID-19 outbreak. While US has repeatedly been making statements pointing towards a possible origin of the Coronavirus in a Wuhan lab, China has all the way been denying the allegations. The latest move by US could further intensify the ongoing tiff between the two nations.
Bill approved by the senate
Introduced by John Kennedy and Chris Van Hollen, the bill approved on Wednesday necessitates companies to certify that they are not under the control of any foreign government. As per the bill, if a company can’t show that it is not under such control or the Public Company Accounting Oversight Board isn’t able to audit the company for three consecutive years to determine that it is not under the control of a foreign government, the company’s securities would be banned from the exchanges.
The move comes after several US lawmakers raised red flags that billions of dollars are flowing into some of China’s largest corporations, much of it from pension funds and college endowments in search of fat investment returns. This America Money is then being used by the technology giants develop leading positions in everything from artificial intelligence and autonomous driving to internet data collection.
Regarding the bill, Mr. Kennedy said : “I do not want to get into a new Cold War, want China to play by the rules.” Mr. Van Hollen added: “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.I’m proud that we were able to pass it today with overwhelming bipartisan support, and I urge our House colleagues to act quickly.”
Source: The Print