Senate Passes Bipartisan Legislation that Shines Light on Chinese Tech Firms

Tech Crunch reported last week that while American investors have been pumping billions of dollars into Chinese firms with suspect ties to the Communist Chinese Government, a new bill passed by the Senate would require that these firms disclose whether they are owned or controlled by a foreign government – including China. The Holding Foreign Companies Accountable Act, introduced by Sens. John Kennedy (R-LA) and Chris Van Hollen (D-MD), and cosponsored by a bipartisan coalition of senators, will protect American investors and their retirement savings from foreign companies that have been operating in the U.S. stock exchanges while flouting Securities and Exchange Commission (SEC) oversight.

Sen. Van Hollen remarked in a statement, “For too long, Chinese companies have disregarded U.S. reporting standards, misleading our investors. Publicly listed companies should all be held to the same standards, and this bill makes commonsense changes to level the playing field.” The bill would also prohibit securities of a company from being listed on any of the U.S. securities exchanges if the company has failed to comply with the Public Company Accounting Oversight Board’s (PCAOB) audits for three years in a row.

China Tech Threat commends the bipartisan group of senators for introducing and passing this important legislation. For too long, firms with undisclosed ties to China’s communist government have been allowed to operate inside the United States and engage in shady practices. This action follows other recent bipartisan movements to ramp up our cybersecurity defenses to protect against Chinese hackers. As our whitepaper “Stealing From the States: China’s Power Play in IT Contracts” reported, China-owned firms are required when compelled by China’s government to collect and transfer our data to foreign destinations, including the Chinese mainland. Bipartisan legislative action to shine a light on these connections is vital for the future of cybersecurity.