US lawmakers hope the SEC will abolish Chinese companies like Alibaba and Tencent

Two Republican lawmakers are calling on the U.S. Securities and Exchange Commission (SEC) to list several Chinese companies, including key names, including Alibaba, Baidu and JD.com, regarding concerns about national security and relationships with the Chinese military.

Republican Speaker of the House China Committee, John Mourenard, and Sen. Rick Scott, head of the Senate Committee Committee, sent a letter Friday to newly appointed SEC Chairman Paul Atkins.

In the letter, they urged the committee to take action against the 25 Chinese companies currently listed on the US stock exchange.

This list includes some of China’s most well-known companies, including Tech Giant Baidu, online retailer JD.com and social media platform Weibo. Lawmakers argue that these companies use US capital to help modernize China’s military, and are linked to serious human rights abuses.

“These entities benefit from American investor capital while advancing the Chinese Communist Party’s strategic goals,” the letter states. “They also pose an unacceptable risk to American investors.”

Commercial companies from China may support the interests of the Chinese state

Moolenaar and Scott highlighted that even businesses that appear to be purely commercial are often involved in supporting the interests of the Chinese state. They cited China’s military fusion policy. This allows the government to force private companies to share technology with the People’s Liberation Army.

The lawmakers’ appeal is part of a broader US push to block China’s access to American money, technology and know-how. The ongoing trade war has already deepened amid growing tensions between Washington and Beijing.

One day before the letter is sent, the CIA released two videos in China, with the aim of adopting more intelligence assets within China.

In the letter, Mourenar and Scott said that the Chinese Communist Party’s control over businesses is “systematically hidden from US investors,” and warned that Chinese law creates “unpredictable risks” that better disclosures cannot be amended. They also argued that many of the 25 companies mentioned were “actively integrated into the Chinese military and surveillance equipment.”

They argued that the SEC already had the authority to act under the responsible laws of Holding Foreign Companies. This allows the agency to suspend or cancel a list of foreign companies that have not met our audit standards or have failed to protect investors.

“The SEC can and must act,” the lawmaker wrote.

Among the companies named were Pony AI, an autonomous driving technology company, and HESAI, a laser sensor company linked by the US Department of Defense with the Chinese military.

Others include Tencent Music, a streaming service owned by Tencent Holdings, which the Pentagon has already been blacklisted, and Daqo New Energy Corp, a solar material producer previously approved by the US Department of Commerce for its use of forced labor in the new jiang.

Lawmakers argue that 25 companies are just a small part

The lawmakers said the 25 companies represent only a small portion of Chinese companies using US capital, working with “genocide dictatorship and our most important geostrategic rivals.”

As of March, 286 Chinese companies were listed on US exchanges, according to the US and China Economic and Security Review Board, which was created by Congress to monitor the economic and national security impacts of US-China trade.

The SEC has not responded publicly yet. Chairman Paul Atkins, who took office last month, has not laid out agenda on China. His predecessor, Gary Gensler, was doing more scrutiny on Chinese companies.

Atkins highlighted the importance of transparent accounting and audit standards to protect investors at the confirmation hearing.

Meanwhile, the House China Committee has increased its focus on American financial companies that do business with Chinese companies accused of military relations and human rights violations.

The Chinese Embassy in Washington opposed US actions. Spokesman Liu Pengyu said China opposed the use of national security as a reason to target businesses and criticised what he described as a politicization of trade and technology.

“We are against turning trade and technology issues into political weapons,” Li said.