The U.S. House of Representatives unanimously voted for restrictions against Chinese companies. This decision could lead to a number of firms leaving the U.S. stock market. This on Wednesday, December 2, reports The New York Times.
The bill is directed against Chinese companies that deny U.S. regulators access to audit reports. Under the bill, companies listed on U.S. stock exchanges must provide evidence that they are not under the control of foreign authorities. Foreign companies are supposed to be required to undergo the same auditing standards as U.S. companies.
Both Republicans and Democrats have supported these measures. The Senate had already passed the bill in May.
Meanwhile, this year Chinese companies received $12 billion from investors as a result of the initial public offering.
The authors of the bill in Congress and the White House claim that the opacity of Chinese companies threatens American investors. As an example, the scandal with the Chinese company Luckin Coffee, which was read in competition with the American giant Starbucks. After the discovery of massive additions to the company’s accounts, its shares were depreciated in 2020.
At the same time, discussions on the audit of Chinese companies are continuing and may still lead to a compromise in the future.
On November 16, Axios reported with reference to sources that U.S. President Donald Trump intends to take tough measures against China, including sanctions, before the end of his term as president.