Lawmakers call on SEC to remove Alibaba and other Chinese companies from stock exchange

Two Republican legislators have recently reached out to the Securities and Exchange Commission requesting action against Chinese companies listed on U.S. exchanges due to potential military connections that threaten American national security. In a letter addressed to SEC chair Paul Atkins, John Moolenaar and Rick Scott singled out 25 Chinese corporations, insisting that these entities, including Alibaba Group, exploit American investments to further the strategic goals of the Chinese Communist Party. The lawmakers argue that these companies not only support military advancements but also engage in severe human rights violations, posing an inherent risk to U.S. investors.

According to the Financial Times, the list of Chinese companies under scrutiny also includes renowned names like Baidu, JD.com, and Weibo. Moolenaar and Scott are adamant that irrespective of their seemingly commercial nature, these businesses ultimately serve the interests of the Chinese state, potentially engaging in activities detrimental to American interests. The legislators emphasized that the SEC possesses the necessary tools and legal authority under the Holding Foreign Companies Accountable Act to halt trading operations and mandate the delisting of these companies.

Following this development, the SEC, along with Alibaba, JD.com, and Baidu, has refrained from offering an immediate response to inquiries made by Reuters. Similarly, both the Select Committee on the Chinese Communist Party and the U.S. Senate committee have chosen to remain silent on the matter. With over 100 Chinese companies collectively valued at approximately $1 trillion listed on American exchanges, the prospect of these firms being forcibly delisted has reignited concerns among investors.

The renewed apprehension surrounding the potential delisting of Chinese companies has emerged amidst the ongoing trade tensions between the United States and China. In light of a recent offer from Washington to engage in discussions concerning President Donald Trump’s punitive tariffs, Beijing has indicated its willingness to evaluate this proposition, hinting at a possible de-escalation of the trade conflict that has significantly impacted global financial markets. The unfolding situation raises questions about the future trajectory of U.S.-China relations and the implications for businesses and investors on a global scale.