Holding Foreign Companies Accountable Act

Floor Speech

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Mr. KENNEDY. Mr. President, I would like to talk for a few minutes about China.

China, as you know, is a wonderful country. It has about 1.4, 1.5 billion people. A lot of times, you see reported that there are only 1.2 billion, but they are a lot bigger than that. America only has about 320, 330 million folks. By land size, it is about the same size as the United States. A lot of people think they are the biggest country by land in the world, but actually Russia is. Canada is No. 2, and China is probably No. 3 by land size, but we are both close.

I love visiting China. The few times I have been there, the people of China were just wonderful people--very interesting, very smart, very hard-working, very aspirational. I say this because when I talk today about China, I want you and my colleagues in the Senate to understand that I am not talking about the people of China. The people of China are good people; the Chinese Communist Party, not so much.

I really regret having to say this. I would not turn my back on the Chinese Communist Party if they were 2 days dead. I don't want to have a Cold War with China. I would rather see us work together for the common good of the planet Earth, and we have tried, but that hasn't worked out real well.

We admitted China to the World Trade Organization on December 11, 2001. It wasn't just our decision, but you know better than I do that China wouldn't have been admitted to the WTO without our support. So we agreed--December 11, 2001. China started cheating December 12. They steal our intellectual property--not just ours but everyone else's in the world. They steal the world's intellectual property. They substantially subsidize their state-owned companies, so other companies throughout the world that don't get state subsidies can't compete with them. For years, they manipulated their currency. They are trying to control the sea lanes of the world. They started in the South China Sea. They are seizing islands that don't belong to them. The next step is, they will try to militarize space. They have used their economic power as a weapon.

Our friends and allies in Australia have asked some very reasonable questions about the origins of the coronavirus and the COVID-19. China has responded by saying: We refuse to buy any more of your products. Those are just the facts.

Now, the managerial elites told us--by that, I mean a lot of the entrenched politicians, the deep thinkers of the world, the academics, many members of the media, the bureaucrats, a lot of the corporate phonies, the ones who think they are smarter, more virtuous than the rest of us in America. They told us: Oh, you are wrong about China. Be patient with China. Be patient with them. Free enterprise will change China.

China has changed free enterprise, and China is on a glidepath to dominance. And do you know what the Congress has done about it? Nothing. Zero. Zilch. Nada.

Let me say it again. I love the people of China. I am talking about the Chinese Communist Party. And I do not--I do not want to get into a new Cold War. All I want and I think all the rest of us want is for China to play by the rules.

Let me give an example. Every company in the world that goes public would like to list on U.S. stock exchanges--the over-the-counter market, the S&P, the New York Stock Exchange. We are very efficient. We are excruciatingly transparent. We like investors throughout the world to know what they are buying. We require companies to disclose. And I think our SEC does an extraordinarily able job. I think Chairman Jay Clayton has just been a rock star.

We have a rule that if you list on our exchanges, you have to file periodic reports. Once again, we want investors to understand what they are investing in. And those reports have to be accurate, or you get in a lot of trouble. One of the things, for example, in one of these reports that companies have to file is an annual audit, but we take it a step further in the United States. There is a Board within the SEC called the Public Company Accounting Oversight Board, PCAOB. Really, all that Board does--I say ``all''; it is important--that Board inspects the audits that the companies file, not because they think the companies are cheating, although some do. But it is like when we play poker with friends. I play poker with friends. They are my friends, but I cut the cards every single time. And that is what our SEC does through this Board. They say: We are going to double check your audits. Everybody has to comply with that rule--American companies, British companies, Malaysian companies, Turkmenistan companies--except one: Chinese companies. They just say: No. They just say: No, we are not going to do it. And you know what we do about it? Nothing. Zero. Zilch. Nada.

This is not a 2- or 3-month phenomenon. This has gone on for years and years and years, and all of us in the executive branch and, yes, in Congress, we huff and we puff and we strut around and we hold hearings and we issue press releases, and then we do nothing. And where I come from, what you allow is what will continue.

I have a bill. It is very simple. It says to all the companies out there in the world, including but not limited to China: If you want to list on an American exchange, you have to submit an audit. SEC has the right to look at that audit and audit the audit, and if you refuse not once, not twice, but three times--if over a 3-year period, each of those 3 years, the company says ``You cannot audit my audit,'' then they can no longer be listed on the American exchanges. It is very, very simple.

Once again, I tried to be very fair in this bill, as did my coauthor, Senator Chris Van Hollen. We spent a lot of time on this. We don't want to be unfair to Chinese companies. We are not changing the rules; they have just been ignoring the rules. We are saying: Look, we are not going to give you just one chance; we are going to give you three chances.

If a Chinese company or any other company ignores the SEC request, what they can do to all the other companies in the world--that is, audit their audits--if you ignore the SEC for 3 years, then you have to take your business somewhere else.

Do you know whom that is going to help the most? The investors of America and the investors of the world.

Most of the companies that are public companies I believe tell the truth, but some of them don't, and this is hard-earned money that people are investing.

The name of our bill--Senator Chris Van Hollen is the coauthor--is the Holding Foreign Companies Accountable Act, and, as I just explained, it is very simple.

945 and the Senate proceed to its immediate consideration.

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