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US stabs itself in back; China complains

Will forcing all foreign firms to comply with US audit standards be the straw that breaks the camel’s back in Beijing?

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A bill passed by the United States Senate that aims to force all foreign firms to comply with US audit standards has received short shrift in Beijing.

China’s securities regulator – the CSRC – hit back, saying the proposal will “weaken confidence” in US stocks, and accusing lawmakers in Washington of “politicis[ing] securities regulation” and creating a law “directly targeted at China”.

Two of those charges are true; the third may be, too. The bill is certainly conveniently timed from a US point of view. Donald Trump has been bashing China for months, his fears of losing re-election due to the Covid-19 pandemic, which started life in the mainland city of Wuhan, clear for all to see.

But in recent weeks, he has banged the rhetoric up a notch. In mid May, he ordered the main government pension fund, the Federal Retirement Thrift Investment Board, not to invest any of its $600 billion portfolio in Chinese securities.

Sino-American relations are further assailed by threats to reignite a trade war, renewed unrest in Hong Kong, and Washington’s decision to tighten sanctions on technology firm Huawei.

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