May 2, 10:50 PM

US Lawmakers Call on SEC to Delist 25 Chinese Companies Including Alibaba, Baidu, JD.com, and Weibo

Two Republican lawmakers, John Moolenaar, chair of the House China Committee, and Rick Scott, chair of the Senate Aging Committee, have called on the U.S. Securities and Exchange Commission (SEC) to delist 25 Chinese companies from American stock exchanges, according to a letter sent to SEC chair Paul Atkins. The lawmakers allege that companies such as Alibaba, Baidu, JD.com, Weibo, Tencent Music, Daqo New Energy Corp, Pony AI, and Hesai have links to the Chinese military and are advancing the objectives of the Chinese Communist Party, including military modernization and human rights violations. They argue that these companies pose an unacceptable risk to U.S. national security and American investors. The letter states that the extent of Chinese Communist Party control over these firms is concealed from U.S. investors and that Chinese law creates unpredictable risks that enhanced disclosures cannot mitigate. The lawmakers cite the Holding Foreign Companies Accountable Act as providing the SEC with the authority to suspend trading and compel delisting of companies that do not adequately protect U.S. investors. The lawmakers reference the Chinese military-civil fusion program, which requires companies to share technology with the People's Liberation Army. They note that there are 286 Chinese companies listed on U.S. exchanges, with a collective market capitalization of around $1 trillion. The SEC has stated that chair Paul Atkins will respond directly to members of Congress. The Chinese embassy in Washington has opposed the move, calling it an overstretching of national security and a politicization of trade and technology issues.

Written with ChatGPT (GPT-4).

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