U.S.-listed shares of Chinese tech giants fell in early trading Thursday after the U.S. adopted measures that would kick foreign companies off stock exchanges if they don’t comply with American auditing standards.
The rules also require that firms prove they are not owned or controlled by an entity of a foreign government and to name any board members who are Chinese Communist Party officials.
The move by the Securities and Exchange Commission is the latest in an unprecedented regulatory crackdown on Chinese technology companies. American regulators say their market power stifles competition.
China cried foul Thursday. Foreign Ministry spokesman Hua Chunying called the action “discriminatory.”
"We urge the U.S. to stop politicizing securities management, stop discriminatory practices against Chinese companies, and to provide a fair, just, and non-discriminatory business environment for companies from various countries, including Chinese companies, to go public in the United States."
Some analysts said U.S.-listed Chinese companies may be unable to comply with American accounting standards because they could risk violating Chinese law.
Shares of Baidu fell 6% out of the gate in New York trading as JD.com dropped 4% and Alibaba and NetEase shed 2%.