With more than 170 Chinese firms currently listed on major U.S. stock exchanges — having a total market capitalization of more than $1 trillion — U.S. Rep. Andy Barr (R-KY) on Aug. 4 introduced a bill that would require them to be transparent about any financial connection to the Chinese Communist Party (CCP).
“This legislation would provide unprecedented transparency for American investors with respect to CCP investments in publicly traded companies,” Rep. Barr said. “I am urging Congress to act now to protect the integrity of our financial markets and our national security.”
The congressman sponsored the Transparency in Chinese Government Investment Act of 2020, H.R. 7924, to require issuers to disclose certain financial support from the Chinese government, according to the congressional record bill summary. Such financial support includes subsidies, grants, loans, loan guarantees, tax breaks, tax incentives, or any preferential treatment related to Chinese government procurement policies.
“CCP investment in American companies frequently leads to CCP manipulation of American companies and investors — whether it be the forced transfer of technology or the outright theft of American intellectual property,” said Rep. Barr. “These are just two examples of many tactics used by the CCP that hijack American innovation, devalue American capital markets, and most importantly threaten the investments of millions of American citizens.”
If enacted, H.R. 7924 also would stipulate that companies must identify any of their officers or directors who hold or formerly held positions with the CCP, Chinese government, or other Chinese affiliations specified in the bill, according to a bill summary provided by Rep. Barr’s office.
Additionally, among other provisions, H.R. 7924 would expose “Chinese companies raising capital in American markets that are part of broader CCP strategic initiatives that undermine American national security and further some of the CCP’s most dangerous activities,” Rep. Barr said.
U.S. Rep. Michael McCaul (R-TX), one of the bill’s two GOP cosponsors, noted that the CCP for years has abused free market principles to the detriment of U.S. businesses and consumers. “This bill gives U.S. investors greater transparency into how publicly listed companies are benefiting from and supporting CCP practices that hurt the U.S. economy,” he said.