US lawmaker urges Trump administration to seek tougher rules for Chinese companies

WASHINGTON: A top US lawmaker called for US-listed Chinese companies that do not meet US auditing standards to be barred from American exchanges, pressing the White House to take a hard line as it ramps up pressure on China.

Republican Senator Marco Rubio advocated for the move in a letter dated Tuesday and sent to administration officials tasked with providing recommendations to the White House by early August to better protect US investors exposed to Chinese companies.

The group includes Treasury Secretary Steven Mnuchin and Securities and Exchange Commission Chairman Jay Clayton.

"Firms listed on American exchanges whose audits are shielded from inspection by [US authorities] should be deregistered," Rubio wrote. He added that Chinese firms whose audits are not provided to the US audit watchdog, known as the PCAOB, should also be banned from American initial public offerings.

The Treasury, the SEC, the Commodity Futures Trading Commission and the Federal Reserve, which received copies of the letter, did not immediately respond to requests for comment.

Pressure has been building in Washington to crack down on US-listed Chinese companies that do not comply with US disclosure and auditing rules since April, when China's Luckin Coffee, which trades on the Nasdaq, said employees fabricated millions of dollars in sales.

Pressure is also mounting from Congress, with the Republican-led Senate passing a bill that if signed into law would bar any foreign company from listing its shares on any US securities exchange if it has failed to comply with the PCAOB's audits for three consecutive years.

Rubio has said he is preparing a bill to ban Chinese companies from US capital markets if they engage in spying, human rights abuse or support China's military.

In the letter, Rubio also urged the officials to recommend bolstering legal options for US investors defrauded by Chinese companies.