This op-ed by Sen. John Kennedy (R-La.) first appeared in National Review on Aug. 5, 2021. 

President Biden should make it clear that Chinese companies listing on America’s stock markets face a choice: Play by our rules of transparency and disclosure or don’t play at all. 

More than 200 Chinese businesses have gone public in U.S. capital markets, but many investors don’t realize that the Chinese Communist Party (CCP) refuses to let these companies open their books to American regulators. This refusal threatens the savings of American workers and families. The financial risk resembles an iceberg: Chinese companies such as Didi and Luckin Coffee are just the tip.

One of the safeguards Americans rely on is the Public Company Accounting Oversight Board (PCAOB). Its regulators vouch for the accuracy of the books of every firm — American and foreign — operating on a U.S. exchange. 

Firms under the thumb of the CCP, though, have a penchant for lying to the PCAOB or snubbing its oversight altogether. That leaves Americans looking to invest flying blind. 

At a time when the PCAOB estimates that the Chinese firms registered with it have a global market capitalization of roughly $2.3 trillion, China has made it impossible “for the PCAOB to obtain timely access to relevant documents and testimony necessary to carry out [its] mission.” 

As a result, Chinese businesses are freer to commit fraud than their American, Asian, and European competitors. Luckin Coffee, for instance, made up a nonexistent $310 million in sales in less than a year. When such fraud comes to light, these businesses’ stock values can drop quickly — dragging Americans’ savings down with them. 

Congress has taken decisive bipartisan action to force companies that flout the PCAOB off U.S. markets, but the CCP probably won’t accept such accountability graciously. In fact, President Xi Jinping’s regime is becoming more belligerent by the day. It’s up to President Biden to protect American investors as the CCP vies for global leadership. 

He can do that by enforcing and building on the Holding Foreign Companies Accountable Act, which Democrats and Republicans came together to pass last year. The law removes firms from American stock exchanges if they refuse PCAOB auditing for three years in a row. 

China’s foreign-ministry spokesperson gave us a clue as to how much the law could disrupt the CCP’s economic strategy when she railed against it as “an unjustified political crackdown on Chinese enterprises.” The crackdown is, to the contrary, wholly justified. We are not asking Chinese companies to do anything that we don’t require all other companies, foreign and domestic, to do.

Unfortunately, President Biden has — perhaps unintentionally — made it harder to counter the CCP’s devilry. As the PCAOB prepared to implement the Holding Foreign Companies Accountable Act, he decided to replace its leadership. That slowed the watchdog’s plans to call on Chinese companies to show their hand. It’s a mistake to think President Xi hasn’t noticed. 

Thankfully, there’s room for President Biden to course-correct. He could re-empower the PCAOB and protect Americans and their savings by supporting the Accelerating Holding Foreign Companies Accountable Act, which would give firms just two consecutive years — not three — to let the PCAOB audit their records. 

This legislation would increase the pressure on Chinese businesses to tell the truth about their assets and liabilities or lose access to American capital, and the CCP knows it. Beijing seems determined to take advantage of U.S. markets by refusing to follow our rules, and Americans’ hard-earned 401(k) and college savings are at risk. 

President Biden warned that China would “eat our lunch” if “we don’t get moving” on infrastructure improvements, but Communist China aims to best America on multiple fronts. The Holding Foreign Companies Accountable Act was a major step in protecting the money American workers have earned and invested. 

We can’t afford to lose momentum as the CCP grows more aggressive. President Biden can and should do more to counter its belligerence by supporting this legislation. It’s time for him to join Democrats and Republicans in Congress in safeguarding Americans’ savings by standing up for the integrity of our markets.