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United States China

Senate Passes Bill That Could Delist Chinese Companies From U.S. Stock Exchanges (marketwatch.com) 161

The U.S. Senate approved sweeping new legislation Wednesday that could ultimately bar many Chinese companies from listing shares on U.S. exchanges, or otherwise raising money from American investors. phalse phace shares a report: Sen. John Kennedy, a Louisiana Republican, submitted the Holding Foreign Companies Accountable Act for unanimous consent, a bill co-sponsored by Democratic Sen. Chris Van Hollen of Maryland and Republican Sen. Kevin Cramer of North Dakota. The bill was approved without objection. The bill would require Chinese companies to establish they are not owned or controlled by a foreign government. Furthermore, they would be required to submit to an audit that can be reviewed by the Public Company Accounting Oversight Board, the nonprofit body that oversees audits of all U.S. companies that seek to raise money in public markets. "I do not want to get into a new cold war," Kennedy said on the Senate floor. "All I want, and I think all the rest of us want, is for China to play by the rules." Steve Dickinson of Harris Bricken wrote in the China Law Blog that American companies seeking to raise money publicly must be audited by an accredited firm and that these audits are further monitored by the PCAOB. China has refused to allow its companies to follow U.S. securities law, arguing that Chinese law bars auditors' work from being transferred out of the country, Dickinson wrote.
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Senate Passes Bill That Could Delist Chinese Companies From U.S. Stock Exchanges

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  • It was made legal at some point to allow foreign government to buy shares in a company. How can a pseudo-free market company like those in the USA compete with an entire government of over a billion people.
    • Uh, what are you talking about? The problem here is that China won't allow American auditors from accounting... which is a violation of Wall Street rules!

      • Wow, Wall Street has rules? Since when?!

        I thought all they did was make insane profits out of thin air, and if they didn't make any then the government gave them free money anyway.

        • Wow, Wall Street has rules? Since when?!

          The rules are made in the Continental Hotel. You may have heard of it.

    • by Megol ( 3135005 )

      That's a lot of bureaucrats.

  • This is tech transfer related. Think Mattson buyout a couple of years ago.
  • "I do not want to get into a new cold war,..." but we are getting into a new cold war.

    • Re: (Score:3, Insightful)

      It's been a new cold war for a long time now. Only thing that has changed is that the US is starting to respond.

    • by DontBeAMoran ( 4843879 ) on Wednesday May 20, 2020 @04:35PM (#60083772)

      That's a bad time to enter a cold war, summer is coming!

  • by RyanFenton ( 230700 ) on Wednesday May 20, 2020 @03:38PM (#60083536)

    If the same companies can just buy the stocks of US companies still, and have them perform as puppets one way or another - how does that make the story better?

    The resources at play are still the same.

    At least when they're mostly playing with their own horse in the race, you can compete evenly with that horse - even if they have more resources in the end, you can identify them on the track in the clear.

    I guess it's a stalling tactic, but it just seems like it's not dealing with the real issues at play.

    But that does make sense too - it's the way the modern market mindset works, all for the valuable short term, until a crash, but cash out first. Then, it's not your problem.

    Ryan Fenton

    • by Tablizer ( 95088 )

      If the same companies can just buy the stocks of US companies still, and have them perform as puppets one way or another - how does that make the story better?

      I would hope that if any one company or the percent of stocks from another given country exceed a threshold, then they'd be subject to similar scrutiny and rules.

    • by rsilvergun ( 571051 ) on Wednesday May 20, 2020 @03:47PM (#60083570)
      but this looks like it's just to force transparency so that investor can make informed decisions. e.g. it's not meant to do anything for American Workers, it's for the investors. Specifically:

      “Stated more directly, unlike companies from the U.S. and Europe and everywhere else in the world, Chinese companies that list on the U.S. stock exchanges are exempt from meaningful financial oversight,” the lawyer said.

    • If the same companies can just buy the stocks of US companies

      It's a start. You don't have to look at this as the one and only action that will ever be taken.

      all for the valuable short term

      Making (or trying to get) China play by the rules is on the contrary a long-term gamble. In the short term play is to keep taking their $.

      • Re: (Score:3, Insightful)

        by Cyberax ( 705495 )

        Making (or trying to get) China play by the rules is on the contrary a long-term gamble.

        What rules? The US should start playing by the rules itself, instead of banning random companies under the pretense of the "national security". As it is, right now the US is starting to be seen as a toxic country that just uses its weight to gain advantage. In the long term (since you're so fond of it), it will result in market power shifting towards Europe and Asia with the US standing alone.

        • What rules?

          Rules about protection of trade secrets and IP.
          https://www.google.com/search?... [google.com]

          it will result in market power shifting towards Europe and Asia with the US standing alone

          Sounds like that'll suite you fine, so be happy.

          • by Cyberax ( 705495 ) on Wednesday May 20, 2020 @04:20PM (#60083708)

            Rules about protection of trade secrets and IP.

            Like the US did in 19-th and the first part of the 20-th century with European patents? But anyway, this is not a problem anymore. China is generating its own IP now at a prodigious rate. This is actually a major source of angst against Huawei, they are actually ahead of the US companies at 5G technologies. The US sanctions are simply a futile attempt to kill off a competitor.

            Sounds like that'll suite you fine, so be happy.

            Sure. I'm planning to move to Sweden eventually. Learning Swedish now...

            • Like the US did in 19-th and the first part of the 20-th century with European patents?

              Yes, let's use that logic. Every nation (and person) has some black mark in their history... so this justifies any other country breaking any law they want, because someone else once broke a law once.

              Like when you were 9, and you took that candy bar from the store without paying. This makes it okay for me to take one today. After all, it's not fair you got that free candy bar when you were 9. Where's my candy bar?

              Sure. I'm planning to move to Sweden eventually. Learning Swedish now...

              Ah Sweden, the same Sweden that had legal slavery 40 years after the US and UK outlawed it.

              Slave trade was outlawed in Britain in 1807, and in the United States in 1808, after which other countries started to follow suit. Sweden made the slave trade illegal in 1813, but allowed slavery until October 9, 1847.

              htt [wikipedia.org]

              • You fucking dunce. Sweden allowed slavery until October 8, 1847? And when, pray tell, did America actually end the practice? December 1865. Look it up. It was called the 13th Amendment to the US Constitution. Oh, and the practice isn't actually ended, it's still fully legal "as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction."
                • Calm down. You are confusing slavery and slave trade.

                  The Act Prohibiting Importation of Slaves of 1807 (2 Stat. 426, enacted March 2, 1807) is a United States federal law that provided that no new slaves were permitted to be imported into the United States. It took effect in 1808, the earliest date permitted by the United States Constitution.

                  https://en.wikipedia.org/wiki/... [wikipedia.org]

                • Slavery is still fully legal in the US? Uh, sure... in some universe, but not this one. You're smoking some great shit.
        • by liquid_schwartz ( 530085 ) on Wednesday May 20, 2020 @04:40PM (#60083798)

          As it is, right now the US is starting to be seen as a toxic country that just uses its weight to gain advantage. In the long term (since you're so fond of it), it will result in market power shifting towards Europe and Asia with the US standing alone.

          I look forward to Europe and Asia getting the shaft from China. Probably never in the history of mankind has a nation been more benevolent than the US post WW2. The US isn't perfect, but if you think China is better I'm happy to watch how that works out for you and stand aside. The sooner the US goes back to minding its own affairs the better.

          • The US has done a lot of fucked up stuff since WW2. Does it not count if it's "classified" or outright denied?

            I think there's a lot of false blame put on the US but their government definitely needs a good smack.

            • The US has done a lot of fucked up stuff since WW2. Does it not count if it's "classified" or outright denied?

              I think there's a lot of false blame put on the US but their government definitely needs a good smack.

              Not saying the US is perfect. Merely saying it's better than the alternative. By all means I'd love to pull back and let the world go to hell without us. The US at its worst is still better than China on their best day.

          • by Cyberax ( 705495 )

            I look forward to Europe and Asia getting the shaft from China. Probably never in the history of mankind has a nation been more benevolent than the US post WW2.

            Unless you live in Vietnam, Korea, Colombia, Nicaragua, Cuba, Iraq, Iran, Syria and some other countries that the US didn't like.

            But I get your point, the US actually prided itself at being fair to other countries and this made the US a great place to do business. You just set up a company, hire people (with easy "at-will" employment) and off you go. The reporting requirements are minimal, trading is easy, no VAT, very responsive customs, etc.

            This is being rapidly lost now, as the US trade policy is ra

    • If the same companies can just buy the stocks of US companies still, and have them perform as puppets one way or another - how does that make the story better?

      Seems like it would be the job of the SEC to enforce the rules. If they haven't addressed the issue in the Bill already then it's only a matter of time before a new Bill lays down those rules.

      Money is like the one thing that Congress actually cares about, so I have no doubt they will stay on top of this issue.

    • by JBMcB ( 73720 )

      If the same companies can just buy the stocks of US companies still, and have them perform as puppets one way or another - how does that make the story better?

      Unless they are doing a complete takeover, legally all they have the right to, as stockholders, is to ask questions of the company, and vote for board members. The largest Disney stockholders wanted Eisner booted out as CEO, and it took years for that to happen. Owning stock does not confer direct control.

    • by gweihir ( 88907 )

      I guess it's a stalling tactic, but it just seems like it's not dealing with the real issues at play.

      Well, that seems to be a good summary of how the current "management" of the US approaches problems.

    • US companies are required to abide by the accounting and auditing rules right now, Chinese companies were the ones allowed to list on the stock exchange without any checks.

      As a result, many Chinese companies exist solely to list, get huge IPO money from investors told about this being the next big thing, and then go bust. With their executives and major shareholders walking away with all the cash.

      Happens on the UK's AIM market for a long time. Of course the stock exchanges don't care - an IPO is an IPO is

  • Sounds to me like the conspiracy theories are somewhat right on saying this this is an excuse by the USA to stay on top. Makes us wonder if the virus was planted or somewhat aided by US labs / military. How many times did USA mess up big time? Or kill millions in wars they started for oil and resources, and the whole world sits idle?

    • by farble1670 ( 803356 ) on Wednesday May 20, 2020 @03:57PM (#60083616)

      Sounds to me like the conspiracy theories are somewhat right on saying this this is an excuse by the USA to stay on top. Makes us wonder if the virus was planted or somewhat aided by US labs / military. How many times did USA mess up big time? Or kill millions in wars they started for oil and resources, and the whole world sits idle?

      Chinese stealing IP / trade secrets isn't a conspiracy theory.
      https://www.google.com/search?... [google.com]

      I'm sure they do want to stay on top, but this in particular is about a level playing field.

      Makes us wonder if the virus was planted or somewhat aided by US labs / military.

      Luckily you don't have to wonder. Every epidemiologist in the world is looking for the origins of the disease. Right now the only part implicated is the Chinese govt. Little things like silencing (or worse) the doctor that was dumb enough to try to warn the rest of the world.
      https://www.npr.org/2020/02/08... [npr.org]

      • Chinese stealing IP / trade secrets isn't a conspiracy theory.
        https://www.google.com/search [google.com]?... [google.com]

        That's a great generalisation, now care to say why it should punish specific unrelated companies as a result?

        I'm sure they do want to stay on top, but this in particular is about a level playing field.

        Forcing someone to prove a negative simply to get investment is not leveling the playing field, in fact if anything it is further driving these companies deeper into seeking their own shady government's support. Quite a consistent approach for America: tax the poor harder to make them poorer, make it harder for criminals to get a job so they return to crime, etc.

        • Forcing someone to prove a negative simply to get investment is not leveling the playing field

          What are you talking about? Foreign companies aren't forced to list themselves on US stock exchanges. They can list themselves on exchanges in their respective countries and follow the local rules.

          The idea here is that foreign companies should play by the same rules that US companies must abide when involved in US stock markets.

          Do you think countries should give foreign companies preferential treatment for some reason?

        • All large Chinese companies are interrelated through government control. They are literally just appendages to the government which is to say the Chinese Communist Party. They do things very differently there.
    • Well, fight back.

      We'll never learn unless you guys fight back. EU should've kicked our military out for starting Iraq, if they had any backbone.

      Hell, kick our militaries out now until we stop ME war. See how long we keep fighting wars over there without German bases. We don't even need the oil.

      • EU should've kicked our military out for starting Iraq, if they had any backbone.

        It's because the EU has no backbone that we're still there. I'd wager that >80% of the US would love to see us pull our troops out of every other country and bring them home. Only politicians love having troops everywhere.

        • I sure would love Europe to pay for their own defense and R&D military budgets to keep up. Or better yet, just buy our extras.
  • Also, why are so many people going along with this? Desperately looking for somebody to blame for their self-inflicted problems?

    No, I am not a "China lover". Stop claiming that.

    • I won't pretend to have a deep understanding of this particular issue, but [asking honestly, here] what is the problem with having everybody play by the same rules? That's ostensibly what this is about, regardless of whatever other [imaginary or otherwise] concerns may be related.

    • If you ignore problems each time one pops up, finally you reach a breaking point and decide to fix all the crap that is going down. The issues are quite numerous at this point.
  • Companies should follow the rules, but *which* rules? Are they the same for everyone? Are we going to delist the Royal Bank of Scotland (NYE:RBS), Volkswagen (OTCMKTS: VWAGY), and our own Fannie Mae and Farmer Mac?

    If this just sets up *special* rules just for *China*, it's not about adherence to "the" rules. It's just politics.

  • by nehumanuscrede ( 624750 ) on Wednesday May 20, 2020 @04:37PM (#60083786)

    This is actually just turning Chinese rules back on themselves.

    If you want to do business in China, you are required to adhere to Chinese laws. Period. Or you don't do business in China.
    The same rules apply in reverse.

    If you want to do business in the United States, you will be required to follow US laws in order to do so. If you don't want or wish
    to do so, take your business somewhere else.

    It really is that simple.

  • I've been following MuddyWatersResearch (@muddywatersre) for years on Twitter. They're bears in general, but I think examining these Chinese companies was their forte at some point. IIRC, their name comes from a Chinese proverb about muddy water concealing things. So. This comes as no surprise to me, and in fact they tweeted out their vindication 4 hours ago. Maybe 10 years ago it was important to inform people about all this--when China was a "story" for gullible investors; but at this point if Americ [wikipedia.org]

  • v American companies seeking to raise money publicly must be audited by an accredited firm and that these audits are further monitored by the PCAOB.

    If this is currently the law, and Chinese companies are not following this law, why are the currently on the stock exchange?

  • Text of the Bill (Score:3, Informative)

    by Michael Duggan ( 124223 ) <mwd@md5i.com> on Wednesday May 20, 2020 @05:37PM (#60084038)

    Here's the text of the bill in question, S. 945:
    https://www.congress.gov/bill/... [congress.gov]

  • Since the overall market started talking about stock market investments in China it's been said that they are a big black box. Now that box has gotten too big, and we have to open it if China wants to grow more.
    At some point China has to do this, and they're going to suffer massively for it, I suspect (why else would they yell so loudly about it? I'm open to ideas)
    In fact, I'd go so far as to say that it's likely to put them very far behind in "economic statistics" (read: made-up numbers). What China needs,

  • ...is still good and dead.
    We'll delist Chinese companies cause Murika!
    We can still get rich by legal insider trading cause...Murika! FUCK YEAH!

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