The U.S. Congress passed legislation on Wednesday that would force Chinese firms to delist from U.S. exchanges unless they abide by U.S. accounting rules. It is expected soon to be signed into law by U.S. President Donald Trump.
The China Securities Regulatory Commission (CSRC) said in a statement that the "Holding Foreign Companies Accountable Act" is "clearly discriminatory" and not based on professional grounds.
The Act would force U.S.-listed companies to prove that they are not controlled by a foreign government, and require companies name Chinese Communist Party (CCP) officials on their boards, and disclose whether their articles of incorporation contains any charter of the CCP.
"We firmly oppose such acts of politicizing securities supervision," CSRC said.
"These rules would force Chinese companies to delist from U.S. securities markets, and will seriously harm the interest of U.S., and even global investors."
The new bill also requires Chinese companies give the U.S. Public Accounting Oversight Board access to audited accounts. Currently, China bars overseas regulators from inspecting local accounting firms, citing national security concerns.
CSRC said this is an issue regarding cross-border supervision, and should be solved through cooperations.
"China remains open to addressing U.S. concerns through dialogues and cooperation," CSRC said in the statement on Friday, reiterating that it looks forward to talks with U.S. regulators toward a solution.
The U.S. legislation will potentially affect U.S.-listed Chinese companies such as Alibaba, Pinduoduo Inc. and oil giant PetroChina Co Ltd., while pushing more secondary listings toward stocks markets in Hong Kong and China.
(Reporting by Samuel Shen and Brenda Goh; Editing by Alex Richardson and Chizu Nomiyama)