In a significant development, U.S. Treasury Secretary Steven Mnuchin stated, companies listed on the U.S. stock exchange, including Chinese ones, which do not comply with accounting standards will be delisted as of December 2021.
U.S. officials and Mnuchin had recommended the move to the U.S. Securities and Exchange Commission last week to ensure that Chinese companies are held to the same standards as their peers.
The move prompted China to call for frank dialogue.
During a briefing at the White House, Mnuchin told reporters that the SEC was expected to adopt the recommendations.
“As of the end of next year … they all have to comply with the same exact accounting, or they will be delisted on the exchanges,” said Mnuchin.
The recommendation is part of a push by the Trump Administration to set right systemic issues that are damaging the U.S. economy and bring a sense of balance to U.S.-China trade relations.
Tensions between China and with other countries, especially its neighbors, have flared in recent months, due to its transgressions, aggressive belligerent territorial claims, handling of the coronavirus outbreak from Wuhan, gross human rights violations in Xinjiang and its handling of Hong Kong.
U.S. President Donald Trump also pointed out that China, has failed to meet its commitments to buy more U.S. goods under the Phase 1 trade agreement that it signed in January 2020, while noting that purchases should increase in 2021.
“We did a Phase 1 deal and it was a wonderful deal, and all of a sudden it means very little in the overall import of things,” said Trump to reporters.
Repeating his calls for reforms in the World Trade Organization, Trump said China should not be seen as a developing country while arguing that Beijing has unfair advantages over developed countries.