US Legislation Could Remove Chinese Firms from Wall Street
The US government is very close to banning certain Chinese firms from trading on the New York Stock Exchange, which could further add to the tensions between Washington and Beijing. On Wednesday, lawmakers passed legislation which would prevent companies that operate with books closed to US accounting regulators from trading on American stock exchanges.
The bill was supported unanimously by the US Senate and awaits President Trump’s anticipated signature to pass. The new law would apply to all foreign companies, although China appears to have been singled out as the primary reason for the measure.
Beijing has been highly resistant to accounting scrutiny of Chinese companies that operate abroad, which are required to maintain their ledgers on mainland China, keeping them closed to foreign auditing agencies. The new legislation will also require publicly listed companies operating on Wall Street to disclose their foreign ownership or controlling entity, including the Communist Party of China.
The bipartisan co-authors of the bill said their objective is to remove deceitful foreign businesses from operating on US stock exchanges. The scrutiny began when Chinese company Luckin Coffee was exposed for considerable accounting discrepancies in their reports to NASDAQ for the second quarter (Q2) ending last June.
Ann Sullivan is a contributing staff writer covering national and world news topics. She brings dedicated experience having written international and domestic news, blogs, and web content for over 20 years. She’s also a published poet and graphic designer with degrees in Business and Graphic Communications and has been a music distributor, music industry sponsorship sales director and band manager.