Lawmakers from both parties sent a joint letter to Securities and Exchange Commission Chair Paul Atkins, calling on the commission to delist companies allegedly linked to the Chinese Communist Party, citing U.S. market and investor security.
The May 2 letter followed recent concerns expressed by lawmakers over U.S. investments in China, including two bills introduced this year.
In the latest effort, the bipartisan group of 10 members of Congress, including Senator Rick Scott, R-Florida, chairman of the U.S. Senate Special Committee on Aging, and Congressman John Moolenaar, R-Michigan, chairman of the U.S. House Select Committee on Strategic Competition between the U.S. and the Chinese Communist Party, said that companies with ties to the Chinese Communist Party “pose an unacceptable risk to American investors” and that by removing them from U.S. exchanges, the SEC would “protect U.S. markets, investors, and national security.”
The letter listed several examples of Chinese companies it asked to be blocked from U.S. stock exchanges, including technology companies Alibaba, Baidu and Tencent, digital finance firm Qifu Technology and e-commerce company JD.com.
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As of March 7, 286 Chinese companies were listed on U.S. exchanges, with a total market capitalization of $1.1 trillion, according to the U.S.-China Economic and Security Review Commission.
According to the congressional letter, allowing the investments to list makes the U.S. a financing vehicle for its most powerful adversary and threatens national security.
Since January, several bills have been introduced in efforts to curtail Chinese investments in the U.S. In March, Senator Jim Banks, R-Indiana, introduced legislation that would ban 401(k) funds from investing in China.
A separate March bill, introduced by Representative Andy Barr, R-Kentucky—the Foreign Investment Guardrails to Help Thwart China Act—would “protect the national security of the United States by imposing sanctions with respect to certain persons of the People’s Republic of China and prohibiting and requiring notifications with respect to certain investments by United States persons in the People’s Republic of China, and for other purposes.”
In April, another bill, introduced by Senator Bernie Moreno, R-Ohio, would require the inter-agency Committee on Foreign Investment in the United States to review “greenfield and brownfield investments by foreign countries of concern.” Though the bill did not specifically name China, a press release announcing the legislation made clear the new authority would curtail investments in the U.S. made by companies based in China.
Meanwhile, in January, the U.S. imposed new restrictions on outbound following an executive order from former President Joe Biden. The restrictions apply to investments in artificial intelligence, semiconductors and quantum computing.
Tags: Congress, Securities and Exchange Commission
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