On Friday, President Donald Trump signed legislation that would withdraw Chinese firms from American stock exchanges unless they conform to U.S auditing standards, the White House reported.
In theory, the new legislation applies to any foreign country outside the United States, but the bill’s measures are evidently devised to target Chinese companies, such as Alibaba Group, Pinduoduo and PetroChina.
The Act is referred to as the “Holding Foreign Companies Accountable Act”, and will require companies to prove their disconnection from any foreign government will allow the U.S. Public Accounting Oversight Board to review their financial audits.
“U.S. policy is letting China flout rules that American companies play by, and it’s dangerous,” Republican Senator John Kennedy of Louisiana, a lead sponsor of the new law, said in a statement.
The legislation, similar to several others taking a harder line on Chinese businesses, had passed Congress considerably this year.