Trump puts the screws to China
For a communist state that has gotten away with so much for so long, the Trump administration, and even Congress, is finally clamping down.
Here's a straight-news story from CNN:
The US government is just one step away from enacting a law that could kick several Chinese firms off Wall Street, further escalating tensions between Washington and Beijing.
The House of Representatives on Wednesday passed a bill that would prevent companies that refuse to open their books to US accounting regulators from trading on US stock exchanges. The legislation won unanimous backing in the Senate earlier this year, meaning it only needs President Donald Trump's signature to become law.
The bill would apply to any foreign company, but the focus on China is obvious. Beijing has resisted such scrutiny. It requires companies that are traded overseas to hold their audit papers in mainland China, where they cannot be examined by foreign agencies. All US-listed public companies would also be required to disclose whether they are owned or controlled by a foreign government, including China's Communist party.
The bipartisan cosponsors of the legislation said earlier this year that their goal was to "kick deceitful Chinese companies off US exchanges." US scrutiny intensified following a scandal involving Luckin Coffee, the Chinese coffee firm that disclosed massive accounting irregularities this spring. It was kicked off the Nasdaq in June.
"US policy is letting China flout rules that American companies play by, and it's dangerous," Senator John Neely Kennedy said in a statement after the House vote.
(It's as if James O'Keefe made honest reporters of them again).
That's welcome news, not just because of the bipartisan part, but because China has always played by rules the rest of us don't. Some 150 Chinese companies, all of which are state-controlled, trade on the U.S. exchanges, following no one's rules but China's. They are non-transparent, the Chinese rulers consider their bookkeeping and other matters all state secrets (Hey, Hunter! Tell us about what you've got), and U.S. regulators have been forced to take China's word for it on what they claim to have. U.S. companies don't get that privilege, but Chinese companies do. Who the heck set up the system to permit China and other foreign entities to evade transparency rules, and not have to open their books? My first suspicion was Bill Clinton, but according to this excellent Forbes piece by Ken Rapoza last summer, the culprit appears to be the Obama-era Sarbanes-Oxley law.
It's redolent of recent U.S. trade pacts and international accords which permit too many state carve-outs from normal rules for China — the Paris climate accord, the United Nations dues process, China's most favored nation status, the WTO — in all of these things, China's privileges spring to mind. The lure of the giant "China market" seems to make trade accord negotiators lose their marbles — or perhaps look for some revolving doors.
China, as it happens, plays by no one's rules.
According to this piece by U.S. director of National Intelligence John Ratcliffe, published on the op-ed page late yesterday for today's Wall Street Journal:
If I could communicate one thing to the American people from this unique vantage point, it is that the People’s Republic of China poses the greatest threat to America today, and the greatest threat to democracy and freedom world-wide since World War II.
The intelligence is clear: Beijing intends to dominate the U.S. and the rest of the planet economically, militarily and technologically. Many of China’s major public initiatives and prominent companies offer only a layer of camouflage to the activities of the Chinese Communist Party.
I call its approach of economic espionage “rob, replicate and replace.” China robs U.S. companies of their intellectual property, replicates the technology, and then replaces the U.S. firms in the global marketplace.
If you have access to this remarkable piece, it lists oodles of bad behavior by China, from muscling unions, to using investments in plants and jobs as leverage and, worst of all, manipulating Congress. Let's not even get into its military buildup or its refusal to cooperate on its spread of the coronavirus. The Chinese are all in on that stuff, getting away with it, as they always do.
But that's changing with President Trump, not just in these congressional measures and warnings from the intelligence community, but in executive actions from Trump as well. It's a sea change.
According John Solomon's JustTheNews:
The Trump administration has instituted a policy to cap at one month the maximum duration of travel visas for Chinese Communist Party (CCP) members and their immediate relatives.
The move will require the individual to utilize their visa to come to America within a month of issuance, according to the New York Times, which noted that people could still be allowed to stay in the country for multiple months.
"Based on standard procedure, U.S. border officials would determine at the point of entry how long the visitor can stay," the outlet reported. "The officials could still permit a multi-month visit."
This is good news, given that Chinese communist party members coming here are unlikely to be coming for friendly purposes. Ratcliffe's reasons tell us a lot. CNN reported earlier that loudly militant Chinese nationalists will be among them, too. After all, if China is as great as they say, why would they want to come here?
It may be the waning months of the Trump presidency, but Trump's never someone to slow down. Some news agencies are calling it some kind of revenge, maybe for coronavirus, maybe for election manipulation, but these measures are necessary, and as a bonus, will give great comfort to our democratic allies in Asia and Australia - which are being bullied by China and terrified of losing Trump to a weakling like Joe Biden. The broad picture is, Trump is always on the job.
Reining in China and forcing it to live by free-market rules it claims to have partially adopted is important. China has been getting away with special treatment for too long. The measures seen are bipartisan. But it's taken Trump to put a stop to these coddlings of China, even if it may be on his way out.
Image credit: Pixabay public domain.