U.S. lawmakers, led by Senator Rick Scott (R-FL), Chairman of the U.S. Senate Special Committee on Aging, and Congressman John Moolenaar (R-MI), Chairman of the U.S. House Select Committee on the Chinese Communist Party (CCP), has sent a joint letter to Securities and Exchange Commission (SEC) Chairman Paul Atkins.
The letter calls on the SEC to begin delisting Chinese companies from U.S. stock exchanges, citing significant national security and investor protection risks.
The lawmakers expressed “grave concern over the continued presence of Chinese companies on U.S. stock exchanges,” arguing that these entities benefit from American investor capital while simultaneously advancing the strategic objectives of the Chinese Communist Party, including military modernization, surveillance, and forced labor.
The letter highlighted several specific Chinese firms listed on U.S. exchanges, including major players like Alibaba, Baidu, Hesai, and Zeekr, as examples of risky companies. These firms, the lawmakers stated, often face U.S. government restrictions, maintain hidden Party control mechanisms, secretly support Chinese military applications, or are linked to forced labor.
The letter also pointed out that many of these companies utilize Variable Interest Entity (VIE) structures, which obscure true control and leave American investors without direct ownership over the actual Chinese operating company. The lawmakers argued that these issues illustrate “deeper, structural problems posed by the CCP’s control over Chinese companies that make the listing of their securities on U.S. exchanges untenable.”
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According to the letter, the examples provided are just a subset of a larger issue. As of March 7, 2025, a total of 286 Chinese firms were listed on major U.S. exchanges. The lawmakers warned that under Beijing’s model of military-civil fusion, seemingly commercial data, capital, hardware, and research can ultimately be harnessed for state purposes, including surveillance, repression, and military operations potentially aimed at the U.S.
The letter directly urged the SEC to “begin delisting companies that are inseparable from China’s military-industrial system or fundamentally incompatible with U.S. disclosure laws.”
Senator Scott has previously been active on this issue, having called on SEC Chairman Atkins to fully implement the Holding Foreign Companies Act (HFCA) to remove non-compliant foreign firms from U.S. exchanges. He also recently introduced a package of five bills aimed at protecting American investors by addressing Communist China’s influence and exploitation of U.S. financial markets.
Joining Senator Scott and Congressman Moolenaar on the letter were Senator Jim Justice and Representatives Andy Barr, Gus Bilirakis, Ashley Hinson, Darin LaHood, Nathaniel Moran, Dan Newhouse, and Rob Wittman.
The lawmakers have requested a response from the SEC detailing its plan for addressing the concerns raised in the letter and have offered their support, including potential legislative action, to ensure U.S. financial markets are not exploited by the CCP “to fuel its rise and imperil our national security.”
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