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COVID-19

Senate passes bill that could ban some Chinese companies from U.S. stock exchanges

David Brancaccio, Nova Safo, and Alex Schroeder May 21, 2020
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Brendan Smialowski/AFP via Getty Images
COVID-19

Senate passes bill that could ban some Chinese companies from U.S. stock exchanges

David Brancaccio, Nova Safo, and Alex Schroeder May 21, 2020
Heard on:
Brendan Smialowski/AFP via Getty Images
HTML EMBED:
COPY

The Senate has unanimously passed a bill that could force some foreign companies off American stock exchanges. Any foreign company could be affected, but senators were thinking a lot about China.

It’s bipartisan legislation written by Sen. John Kennedy, R-La., and Sen. Chris Van Hollen, D-Md. They say China is cheating and misleading American investors.

The idea behind the bill is to compel all foreign companies to allow American regulators access to their books, to ensure their accounting is honest and sincere. This is the same standard American companies must meet to be listed on stock exchanges.

The problem is that there are more than 200 foreign firms which are not meeting that standard. Many are Chinese. And they have a combined market capitalization of nearly $2 trillion.

Their stocks are traded, but American investors don’t have a full picture of what’s going on inside those companies.

If the bill passes the House and is signed into law, whether or not we see 200 companies immediately delisted depends on how companies cooperate.

There’s a three-year provision in the bill, so if American regulators haven’t had access to a company’s records for three consecutive years, then the Securities and Exchange Commission can prohibit trading of that company’s shares.

Shas Das, who between 2011 and 2015 was the chief U.S. negotiator with Chinese regulators, told Marketplace Thursday morning that he doesn’t know “that the Chinese companies would effectively capitulate.”

“And I say that because they have other jurisdictions that would be more than happy to be venues for their listing,” Das said.

He says Hong Kong’s stock exchange is one likely destination for these companies, rather than more transparency with U.S. regulators.

The bill also requires firms to disclose if they’re owned or controlled by a foreign government. This has long been a big issue for American leaders — to what extent Chinese firms answer to that country’s government.

COVID-19 Economy FAQs

So what’s up with “Zoom fatigue”?

It’s a real thing. The science backs it up — there’s new research from Stanford University. So why is it that the technology can be so draining? Jeremy Bailenson with Stanford’s Virtual Human Interaction Lab puts it this way: “It’s like being in an elevator where everyone in the elevator stopped and looked right at us for the entire elevator ride at close-up.” Bailenson said turning off self-view and shrinking down the video window can make interactions feel more natural and less emotionally taxing.

How are Americans spending their money these days?

Economists are predicting that pent-up demand for certain goods and services is going to burst out all over as more people get vaccinated. A lot of people had to drastically change their spending in the pandemic because they lost jobs or had their hours cut. But at the same time, most consumers “are still feeling secure or optimistic about their finances,” according to Candace Corlett, president of WSL Strategic Retail, which regularly surveys shoppers. A lot of people enjoy browsing in stores, especially after months of forced online shopping. And another area expecting a post-pandemic boost: travel.

What happened to all of the hazard pay essential workers were getting at the beginning of the pandemic?

Almost a year ago, when the pandemic began, essential workers were hailed as heroes. Back then, many companies gave hazard pay, an extra $2 or so per hour, for coming in to work. That quietly went away for most of them last summer. Without federal action, it’s mostly been up to local governments to create programs and mandates. They’ve helped compensate front-line workers, but they haven’t been perfect. “The solutions are small. They’re piecemeal,” said Molly Kinder at the Brookings Institution’s Metropolitan Policy Program. “You’re seeing these innovative pop-ups because we have failed overall to do something systematically.”

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