The two best Republican legislators are calling on a number of Chinese companies, including the main names such as Alibaba, Baidu and JD.com, concerns about national security and Chinese military links.
John Moelenaar, chairman of the Chinese Commission, and Rick Scott, head of the Senate Aging Commission, sent a letter to Paul Atkins, chairman of the newly built SEC.
In letterThey called on the Commission to take measures against 25 Chinese companies that are currently listed on the US stock exchange.
The list includes some of the most prominent companies in China, such as Tech Giant Baidu, online seller JD.com and social media platform Weibo. Legislators claim that these companies use US capital to help Chinese military modernization and are related to serious human rights violations.
“These units will benefit from the capital of the American investor while promoting the strategic goals of the Chinese Communist Party,” the letter said. “They also pose an unacceptable risk for American investors.”
Business enterprises from China may support the interests of the Chinese state
Moolenar and Scott emphasized that even with the interests of the Chinese state, purely commercial companies are often accompanied by purely commercial companies. They quoted the Chinese military thermonist synthesis policies, which allows the government to force private companies to share technology with people's liberation armies.
The legislators' call is part of the wider US to reduce Chinese access to American money, technology and know-how. It comes in the middle of the growing tensions between Washington and Beijing, which is already exacerbated by the ongoing trade war.
Just one day before the letter was sent, the CIA published two Chinese videos aimed at recruit more intelligence in China – another signal of increasing competition between two forces.
Moolenar and Scott said in their letter that the control of the Chinese Communist Party over companies is “systematically hidden from US investors” and warned that Chinese laws create a “unpredictable risk” that cannot be improved by better disclosure. They also claimed that many of these 25 companies were “actively integrated into the Chinese military and security equipment”.
They claimed that the SEC already has the authority to operate under the laws of foreign companies, which allows the agency to suspend or cancel a listing of foreign companies that do not meet us with auditing standards or are unable to protect investors.
“SEC can – and must – act,” the legislators wrote.
Among the companies were the self-driving technology company Pony AI and the Laser-Sensor company Hesai, whose US Defense Ministry is involved in the Chinese military-claim that Hesai denies.
Others include Tencent Music, a streaming service Tencent HoldingsAlready Pentagon's blacklisted and Daqo New Energy Corp, a solar manufacturer of materials whose US Trade Department has previously sanctioned over the alleged use of forced operation in Xinjiang.
Legislators claim that 25 companies are only a small part
According to legislators, 25 companies represent only a small proportion of Chinese companies that use US capital while working with genocide dictatorship and our main geostratic rival.
As of March, according to the US-China Economic and Security Overview, 286 Chinese companies were listed on US stock exchanges, the Congress created to monitor the impact of US-China trade economic and national security.
SEC has not yet responded publicly. Chairman Paul Atkins, who took office last month, has not compiled the agenda related to China. His predecessor Gary Gensler had made more control over Chinese companies.
Attkins emphasized the importance of transparent accounting and auditing standards in protecting investors.
In the meantime, the Chinese Committee has also increased the focus on American financial companies dealing with Chinese companies accused of military ties or human rights violations.
The Chinese Embassy in Washington rejected US activities. Liu Pengyu, a spokesman, said that China is opposed to the use of national security as a reason to target his businesses and criticized what he described as politicization of trade and technology.
“We are opposed to the transformation of trade and technological problems into political weapons,” Liu said.
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