As tensions return to Hong Kong with a bang after several months of dormancy as thousands of mostly young demonstrators took to the streets to demonstrate China's National Security Law, where they were met by volleys of tear gas, Beijing has also been busy crafting the country's media response to the escalating diplomatic feud between with the US, and as the Global Times wrote early on Monday, the bill that aims to delist Chinese companies from the stock exchanges is "directly targeting China," and is grounded in political rather than professional motives, the China Securities Regulatory Commission (CSRC) said at a press conference on Sunday.
"The bill is jeopardizing the interest of both sides. It is deterring foreign companies from being listed in the US and is weakening international investors' confidence in the US' capital market," the CSRC said.
According to the report the US bill, titled The Holding Foreign Companies Act which was passed by the Senate on Wednesday and will likely pass the Democratic controlled house, would:
- force Chinese companies to adhere to US securities law and could potentially delist Chinese companies if passed, while some of its content explicitly targets China.
- require foreign-owned companies to establish they are not controlled by a foreign government, and would need to submit to an audit review by the Public Company Accounting Oversight Board (PCAOB). If the US regulators cannot inspect a company's audits for three consecutive years, it will be banned from trading on the US market.
Quoting Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, the Global Times writes that "The Trump Administration is trying to squeeze Chinese companies out of the US market," and "is sabotaging its self-claimed free market, and is irresponsible to the investors."
He added that "stock exchanges in China, including the Hong Kong Stock Exchange and the ChinNext board in Shenzhen Stock Exchange have been going through reforms over the years to be more open," Dong said. "Even if the Chinese companies have to be delisted in the end, the domestic exchanges will be welcoming."
As of February 2019, 156 Chinese companies have been listed in the US, according to the US-China Economic and Security Review Commission. Some of the biggest Chinese companies, including e-commerce giants Alibaba Group and JD.com, are listed on US stock exchanges.
So while China is accusing Washington of redirecting the ongoing political conflicts by imposing soft capital controls, Beijing's argument for now appears to be that the US will be hurt more than the Chinese companies that are delisted, instead of hinting at what, if any, retaliation it has in mind.
Of course, the Trump admin's latest crackdown on Chinese publicly-listed companies is just one of the many strains in the US China relationship that have emerged in recent weeks, and which according to China, are tantamount to a new cold war. Some of the other topics that have forced a sharp escalation in tensions between the two countries include:
- The sanctions of Chinese tech and telecom companies
- The origin of the coronavirus
- The implementation of the Phase 1 of the trade deal
- Tensions over Hong Kong
- Growing fears of a Taiwan invasion
Meanwhile, China's propaganda machine remains in overdrive as the following recent Global Times headlines indicate:
- New York Times front page denounces Trump's failure in virus battle
- Impeding Chinese firms will hit US as global financial center
- China-US ties have arrived at unexpected low
- Suppressing WHO amid pandemic lack in basic humanity, unacceptable to intl community: Chinese FM
- US should not underestimate Chinese people's determination for reunification: Wang Yi
- Chinese experts warn of 'ample countermeasures' as US includes more Chinese tech firms on Entity List
- 'Wolf warrior’ diplomacy a US trait: Global Times editorial
- Washington escalates Taiwan card out of anxiety
- China’s chip industry must carve out a niche of its own amid US pummeling