(Adds Chinese foreign ministry comment)
WASHINGTON/HONG KONG, Dec 2 (Reuters) - The U.S. House of
Representatives is expected to pass legislation this week that
could prevent some Chinese companies from listing their shares
on U.S. exchanges unless they adhere to U.S. auditing standards,
congressional aides said.
The bill would give Chinese companies such as Alibaba
, tech firm Pinduoduo Inc. and oil
giant PetroChina Co Ltd. three years to comply with U.S.
rules before being removed from U.S. markets.
Greater scrutiny could also deter other Chinese firms from
listing in the United States, say industry participants. Such
listings reached a six-year high this year.
The House is scheduled to vote on Wednesday evening on "The
Holding Foreign Companies Accountable Act," which bars
securities of foreign companies from being listed on any U.S.
exchange if they have failed to comply with the U.S. Public
Accounting Oversight Board's audits for three years in a row.
Aides said there is bipartisan backing for the measure.
Measures taking a harder line on Chinese business and trade
practices generally pass Congress with large margins.
Chinese foreign ministry spokeswoman Hua Chunying described
it as a discriminatory policy that politically oppresses Chinese
firms.
"Instead of setting up layers of barriers, we hope the U.S.
can provide a fair and non-discriminatory environment for
foreign firms to invest and operate in the U.S.," Hua told a
news conference.
Chinese authorities have long been reluctant to let overseas
regulators inspect local accounting firms, citing national
security concerns.
Officials at China's securities regulator indicated earlier
this year they were willing to allow inspections of audit
documents in some circumstances, but past agreements aimed at
solving the dispute have failed to work in practice.
The bill, sponsored by Republican Senator John Kennedy and
Democratic Senator Chris Van Hollen, passed the Senate in May by
unanimous consent, so House passage would send it to the White
House for U.S. President Donald Trump to veto or sign into law.
Trump is expected to sign the bill if it is approved,
according to a person familiar with the matter.
The measure would also require public companies to disclose
whether they are owned or controlled by a foreign government.
Shaun Wu, a Hong Kong-based partner at law firm Paul
Hastings, said increased enforcement against Chinese companies
was likely even though Democrat Joe Biden will become president
in January.
He said that if the bill becomes law, "all Chinese companies
listed in the U.S. will face enhanced scrutiny by the U.S.
authorities and inevitably consider all available options."
This could include listing in Hong Kong or elsewhere, he
said. Several U.S.-listed Chinese firms, including Alibaba and
KFC China operator Yum China , have recently
carried out secondary listings in Hong Kong.
(Reporting by Patricia Zengerle in Washington and Alun John in
Hong Kong; Additional reporting by Alexandra Alper in
Washington; Editing by Matthew Lewis and Ana Nicolaci da Costa)