WASHINGTON (BLOOMBERG) - The Senate approved by unanimous consent on Wednesday (May 20) legislation that could bar some Chinese companies from being listed on US stock exchanges amid increasingly tense relations between the world's two largest economies.
The Bill, introduced by Senator John Kennedy, a Republican from Louisiana, and Chris Van Hollen, a Democrat from Maryland, would require companies to certify that they are not under the control of a foreign government.
If a company can't certify that it is not under such control or the Public Company Accounting Oversight Board isn't able to audit the company for three consecutive years to determine that it is not under the control of a foreign government, the company's securities would be banned from the exchanges.
"I do not want to get into a new Cold War," Kennedy said on the Senate floor, adding that he wants "China to play by the rules."
So far, no companion measure has been introduced in the House of Representatives, according to a Senate aide familiar with the Bill.
The legislation - S. 945 - is another example of the rising pushback against China in Congress that had been building over trade and other issues. It has been amplified more recently by Republicans as President Donald Trump has sought to blame China as the main culprit in the coronavirus pandemic.
GOP lawmakers have in recent weeks unleashed a torrent of legislation aimed at punishing China for not being more forthcoming with information or proactive in restricting travel as the coronavirus began to spread from the Wuhan province, where it was first detected.
But the president's focus on blaming China for the pandemic has threatened what had been a strong bipartisan consensus that the US needs to get tougher on the country. Some Democrats have begun to shy away from initiatives that could be seen as further politicising the issue as the US heads towards November's presidential election.
Kennedy told Fox Business on Tuesday that the Bill would apply to US exchanges such as Nasdaq and the New York Stock Exchange.
"I would not turn my back on the Chinese Communist Party if they were two days dead," Kennedy said. "They cheat. And I've got a Bill to stop them from cheating."
The other sponsors of the Kennedy Bill are Senators Kevin Cramer of North Dakota and Rick Scott of Florida, both Republicans.