U.S. If regulators do not review their financial audits, the U.S. President Donald Trump on Friday signed into law legislation that would exclude Chinese companies from the stock market, which could further escalate tensions between the two countries.
The move will affect corporate entities such as Alibaba Group Holdings Limited. And serves Beijing again before Trump resigns in January.
The president, who has long criticized China for unfair trade practices, has imposed billions of dollars in tariffs on imports. But his rhetoric is sharp as he blames Beijing for the global corona virus outbreak this year – a major issue for Joe Biden as he loses the election
The law won bipartisan support earlier this month after it easily wiped out the U.S. Senate in May. While this applies to any foreign business, supporters of the bill have stated that their goal is to target China.
Chinese companies have for years used US financial markets and dollar-based funds as a key financial component to grow their businesses. Although the move provides for a one-phase implementation period, after three consecutive years of non-compliance, it could cause real damage to Chinese companies that fail to meet audit standards.
Holding foreign companies liability law should establish whether companies are owned or not controlled by a foreign government, and will allow the Board of Public Accounts Oversight Board of America to review their financial audits.
Although the law applies to companies in any country outside the United States, the actions in the bill clearly target Chinese companies such as the Alibaba Group, Bintudovo and Petrosina. The U.S. is an important source of capital for businesses. Companies have a three-year grace period before facing the threat of losing access to the stock markets.
Trump’s signing of the law ended a wave of recent actions against China, including guidelines restricting travel visas for 92 million Communist Party members. Anyone with a 10-year visa will now be reduced to one month.