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Are Chinese Companies with Military Ties at Risk of Delisting from US Exchanges?
The heads of two Congressional panels, John Moolenaar and Rick Scott, have recently urged the Securities and Exchange Commission (SEC) to take action against Chinese companies listed on American exchanges that they claim have military links posing a risk to US national security. Among the companies targeted are tech giants like Alibaba, Baidu, JD.com, and Weibo.
In a letter addressed to SEC chair Paul Atkins, the lawmakers highlighted concerns about these Chinese companies benefiting from American investor capital while supporting the strategic objectives of the Chinese Communist Party, including military modernization and human rights violations. They emphasized the need to delist these companies to protect American investors and reduce China’s ability to leverage US resources for military purposes.
The push to delist Chinese companies comes amidst ongoing trade tensions between the US and China, with the US government taking steps to limit Chinese access to American capital, technology, and expertise. The lawmakers pointed out that many of the Chinese companies in question were not transparent about their ties to the Chinese military and surveillance apparatus, posing a significant risk to US investors.
The SEC has been urged to use its authority under the Holding Foreign Companies Accountable Act to suspend trading and compel delisting of Chinese companies that do not adequately protect American investors. This move is seen as a way to address the growing concerns about national security risks associated with Chinese companies listed on US exchanges.
The list of targeted Chinese companies includes Pony AI, Hesai, Tencent Music, and Daqo New Energy Corp, among others. The lawmakers argue that these companies, which are integrated into China’s military and surveillance activities, pose a threat to US interests and should be delisted to safeguard national security.
As the SEC considers taking action against Chinese companies, investors and stakeholders are closely monitoring the situation. The move to delist Chinese companies could have significant implications for US-China relations and the global economy. Stay tuned for updates on this developing story.
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