The US government is just one step away from enacting a law that could 'kick' several Chinese firms off Wall Street, which can further escalate tensions between Washington and Beijing.
The House of Representatives on Wednesday passed a Bill that would prevent compes that refuse to open their books to US accounting regulators from trading on US Stock exchanges, which only needs President Donald Trump's signature to become law, reported CNN.
The Bill states that the compes would be removed from the US exchanges after three years if they did not provide US regulators access to their audit information.
Though the Bill would apply to any foreign country, the focus on China is obvious, as Beijing has resisted such scrutiny. All US-listed public compes would also be required to disclose whether they are owned or controlled by a foreign government, including China's Communist Party.
According to CNN, the bipartisan co-sponsors of the legislation said earlier this year that their goal was to 'kick deceitful Chinese compes off US exchanges'. The US scrutiny intensified following a scandal involving Luckin Coffee, the Chinese coffee firm that disclosed massive accounting irregularities this spring. It was kicked off at the NASDAQ in June.
Politicians from both parties in the US have criticised China's lack of transparency in its financial system, saying it could be putting American investors at risk of fraud.
This legislation would give Trump yet another way to put pressure on China before he leaves office in January.
The Trump administration has targeted compes like TikTok and forced Huawei into a fight for survival and banned Americans from investing in some Chinese firms, while several Chinese compes have been preparing contingency plans in light of the heightened scrutiny from the United States, reported CNN.
Since the start of the COVID-19 pandemic, tensions have been rising between the two countries over the issue of trade, Hong Kong legislation, origins' of the virus and Beijing's rising military aggression.
Amid the escalation, the State Department under Trump and Secretary of State Mike Pompeo has pursued staunch policy measures against the Chinese government, CNN reported.
On Thursday, the Trump administration has reduced the US visitor visas validity period for the Chinese Communist Party (CCP) officials and their family members from 10 years to one month.
The US Department of Defense (DoD) on the same day blacklisted four more Chinese firms from accessing military tech, labelling them as being controlled by the communist nation's military.
These moves are among the series of actions taken by the Trump administration, setting a tone for the US President-elect Joe Biden taking office in the month of January.
( With inputs from ANI )
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