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House passes bill that could delist Chinese companies from US stock exchanges

US Rep. Ilhan Omar (D-MN) (L) talks with Speaker of the House Nancy Pelosi (D-CA) during a rally with fellow Democrats before voting on H.R. 1, or the People Act, on the East Steps of the US Capitol on March 08, 2019 in Washington, DC. (AFP photo)
The US and Chinese flags are seen at a trade port in Qingdao in China's eastern Shandong province. (AFP photo)

The US House has passed a bill that would block Chinese firms from American markets over accounting rules amid the already strained relations between the world’s two powerful economies.

The bill cleared on a voice vote Wednesday could bar many Chinese companies from listing shares on US exchanges or otherwise raising money from American investors.

The vote on the legislation is one of the few bipartisan moves by Congress to take action against China since the coronavirus pandemic began.

The bill is also part of a broader clampdown on China's alleged involvement with Wall Street that has been gaining momentum in Congress, within the financial industry, and the White House.

"This may be one of the most important investor protection pieces of legislation this year," said Rep. Brad Sherman (D-Calif.), chair of the subcommittee overseeing capital markets on the House Financial Services Committee.

Sherman said Sen. John Kennedy (R-La.), the sponsor of the legislation in the Senate, "certainly hasn't heard that the President plans to veto the legislation."

Known as the Holding Foreign Companies Accountable Act, the measure could get signed into law quickly by President Donald Trump as it was approved by the Republican-controlled Senate in May.

The bill requires that Chinese companies adhere to US auditing standards, giving firms such as Alibaba, three years to abide by US rules before being removed from US markets.

Chinese foreign ministry spokeswoman Hua Chunying has called the legislation a discriminatory policy that politically oppresses Chinese companies.

It shows “the United States applies discriminatory policies to Chinese companies and launches political oppression against them," Chinese Foreign Ministry spokesperson Hua Chunying said at a press conference.

“We firmly oppose politicizing securities regulation. We hope the US side can provide a fair, just and non-discriminatory environment for foreign companies to invest and operate in the US, instead of trying to set up various barriers,” Hua said.

This comes after Trump signed an executive order earlier this month prohibiting Americans from investing in those Chinese companies that his administration claims support Beijing’s military.

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