Chairman John Moolenaar of the House Select Committee on China and Chairman Rick Scott of the Senate Special Committee on Aging have addressed concerns regarding Chinese companies' access to U.S. markets. They have sent letters to the U.S. Securities and Exchange Commission (SEC) and the Public Company Accounting Oversight Board (PCAOB), seeking an urgent briefing about potential risks to American investors from Chinese companies listed on U.S. stock exchanges.
The focus is a 2022 agreement between Chinese regulators and the PCAOB concerning audit inspections of China-based companies. The lawmakers express concern that despite this agreement, there are still significant gaps in transparency and regulatory oversight.
"The agreement between Chinese securities regulators and the PCAOB allows the CCP government to withhold information from U.S. investors, which concerns us," they wrote. "This arrangement gives us significant concern that American investors are not adequately protected."
They also highlight that Chinese laws require companies to serve state interests, noting, "CCP-linked companies cannot operate independently from the state," referring to national security laws that classify critical business information as state secrets.
According to the Holding Foreign Companies Accountable Act (HFCAA), foreign firms whose audits cannot be fully inspected by the PCAOB should be delisted after two consecutive years. However, Moolenaar and Scott stress that this deal leaves American investors vulnerable.
Their request follows an April 2025 joint hearing examining how the CCP "exploits American retirees and undermines national security."
Moolenaar and Scott seek clarity on how U.S. regulators plan to protect investors and ensure transparency from Chinese firms listed on American exchanges.
Read the SEC letter here.
Read the PCOAB letter here.
