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A leading Chinese hawk in the U.S. Congress has attacked Chinese listings in the United States following the failed initial public offering of the Didi Chuxing app, as the debacle attracted control in Washington.
Marco Rubio, the Florida Republican senator, told the Financial Times in a statement that it was “reckless and irresponsible” to allow Didi, who he described as an “inexplicable Chinese company,” to sell shares on the New York Stock Exchange.
He added that normative repression from Beijing which unleashed a brutality decrease in share price following the IPO, it “further underscores the risks” for U.S. investors in Chinese companies.
“Even if the shares recover, U.S. investors still don’t have information about the company’s financial strength because the Chinese Communist Party is preventing U.S. regulators from reviewing the books,” Rubio said. “This puts US retirees’ investments at risk and desperately pushes the US dollars into Beijing.”
Rubio’s comments highlight how Didi’s problematic IPO could generate new efforts in Congress to tighten the screws on Chinese lists in the US.
Last year, former President Donald Trump signed legislation imposing tougher accounting standards on Chinese entities selling shares in the United States after strong support in Congress.
Indeed, the law prohibits companies from trading in the U.S. if they do they are not subject to audits of the Washington-based Public Company Accounting Oversight Committee for three consecutive years.
But China’s hawks in Washington believe the new legislation should serve as a starting point for a broader decoupling of capital markets between the two countries.
“This failure will only reinforce the decision of many on Capitol Hill and elsewhere to demand greater protection from U.S. investors with respect to Chinese companies in our capital markets,” said Roger Robinson, former chairman of the Economic Review Commission. and US-China Congress Security.
Robinson, who is now chief executive of RWR Advisory Group, a Washington-based consultancy, added that the episode served to remind Wall Street of the whims of [the communist party’s] market interventions and the party ‘s total disregard for cascading disadvantages. “
Washington’s focus on Chinese quotes in the United States was boosted after regulators accused Luckin Coffee, the Chinese coffee chain, of having defrauded investors, forcing the company to pay a $ 180 million settlement. Earlier this year, Luckin archived to protect bankruptcy in the US.
But while U.S. regulators during the Trump administration played a major role in raising alarms about Chinese listings in the U.S., the Biden administration has yet to react to the failed IPO. of Didi. The U.S. Treasury Department declined to comment, as did the Securities and Exchange Commission.
Additional reports from Kiran Stacey in Washington
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