US Legislators Demand Delisting of Chinese Firms Over Security Concerns

In a significant move, House Select Committee on China Chairman Moolenaar and Senate Committee on Aging Chairman Rick Scott have penned a letter to SEC Chairman Paul Atkins. They urge the delisting of Chinese firms on US stock exchanges that are perceived as threats to both national security and investor protection, as announced by the Select Committee on the CCP (SCCCP).

The letter identifies companies such as Alibaba, Baidu, Hesai, and Zeekr, accusing them of leveraging American financial resources to advance the strategic agenda of the Chinese Communist Party (CCP), encompassing military progress, surveillance activities, and forced labor practices.

Chairman Moolenaar emphasized the dual role of these companies: "These businesses are not merely commercial entities; they are tools of the Chinese Communist Party's wider agenda to undermine US interests." He urged the SEC to take decisive measures to protect American investors and national security. Top Chinese firms like Alibaba, JD.com, and Tencent Music have links to military or surveillance operations under the CCP.

Many Americans with 401(k)s or pension plans are unaware of their investments in firms tied to the CCP due to complex ownership structures. These firms are hard to audit and are often shielded from disclosing their CCP connections, leaving American investors in the dark about links to forced labor in Xinjiang or technology that surveils Chinese citizens, including Uyghurs and other minorities.

The committee urges the SEC to employ the Holding Foreign Companies Accountable Act and relevant sections of the Securities Exchange Act to suspend or delist non-compliant enterprises. They emphasize the SEC's capacity and responsibility to act swiftly, ensuring that US markets do not become a funding source for adversaries of the United States, as per the release.

(With inputs from agencies.)