Republican Lawmakers Call on SEC to Delist Chinese Companies Over National Security Concerns
Two top Republican lawmakers are urging the U.S. Securities and Exchange Commission (SEC) to delist several Chinese companies, including major names like Alibaba, Baidu, and JD.com, citing national security concerns and ties to China’s military.
John Moolenaar, the Republican chair of the House China committee, and Senator Rick Scott, head of the Senate Committee on Aging, sent a letter to newly appointed SEC Chairman Paul Atkins, calling for action against 25 Chinese firms currently listed on U.S. stock exchanges.
Concerns Over Chinese Companies Supporting State Interests
The lawmakers argue that even seemingly commercial companies are often involved in supporting the interests of the Chinese state, citing China’s military-civil fusion policy. This policy allows the government to compel private companies to share technology with the People’s Liberation Army.
This call to delist Chinese companies is part of a broader U.S. effort to restrict Chinese access to American capital, technology, and expertise. It comes amid escalating tensions between Washington and Beijing, exacerbated by an ongoing trade war.
SEC Urged to Act Under Holding Foreign Companies Accountable Act
Moolenaar and Scott maintain that the SEC has the authority to act under the Holding Foreign Companies Accountable Act, which allows the agency to suspend or revoke the listing of foreign companies that do not meet U.S. auditing standards or fail to protect investors.
The lawmakers assert that Chinese companies pose an “unacceptable risk” to American investors and are “actively integrated into the Chinese military and surveillance apparatus.”
Broader Implications for U.S.-China Relations
The lawmakers argue that the 25 firms identified are just a fraction of Chinese companies using U.S. capital while collaborating with a regime accused of human rights violations and posing a national security threat.
As of March, there were 286 Chinese companies listed on U.S. exchanges, according to the U.S.-China Economic and Security Review Commission, underscoring the scale of the issue.
Response and Outlook
SEC Chairman Paul Atkins has not yet publicly responded to the lawmakers’ letter. However, during his confirmation hearing, Atkins emphasized the importance of transparent accounting and auditing standards for safeguarding investors.
Meanwhile, the House China Committee has ramped up scrutiny of U.S. financial firms doing business with Chinese companies linked to military activities or human rights abuses.
The Chinese embassy in Washington has criticized the U.S. actions, opposing the use of national security as justification for targeting Chinese companies and denouncing the politicization of trade and technology.