Access to US funds may be restricted
Reducing Chinese state firms' easy access to raising funds on US stock markets could be one of the only ways of effectively policing the weapons trade, a US senator warned yesterday.
Republican Fred Thompson claimed his proposed side law to the China trade vote would not interfere with free markets. It would however force the US Government to provide a lot more information to financial regulators and the wider marketplace.
'We cannot turn a blind eye to the real world,' Mr Thompson warned. 'It is not so much the end use of the funds that we are worried about, but the fact that they are being raised and sort of entities that are raising them.' His proposals demand a more strenuous annual review of China's weapons proliferation record as well as firming up a schedule of sanctions - including limiting access to American capital markets.
Protests from a wide variety of activists and national security groups sparked problems for a PetroChina offering in New York earlier this year, but other Chinese firms are lining up to seek funds in the US. The success of the drive against PetroChina has lifted awareness over the possibility of new capital markets sanctions being created, congressional sources added.
Mr Thompson's comments came as the Republican Senate leadership agreed to vote on his bill next month if he agreed to split it from the vote on Permanent Normal Trade relations with China. The move effectively removes a potential obstacle from the trade vote, and it may also focus more attention on Mr Thompson's ideas, which are almost certain to face strong opposition from the Clinton administration. The extent of Senate support remains unclear.
A date has yet to be formally set for the trade vote itself, but Senate Majority Leader Trent Lott said he was still hopeful of success by late July.
