In a major move, the US Senate has overwhelmingly approved legislation that could lead over 800 Chinese companies such as Alibaba Group Holding Ltd. and Baidu Inc. to be barred from listing on American stock exchanges amid increasingly tense relations between the world’s two largest economies.
The bill called the Holding Foreign Companies Accountable Act, was approved by unanimous consent.
Before becoming a law, it has to be approved by the House of Representatives and be signed off by President Donald Trump. According to the bill, the companies would have to certify that they are not under the control of a foreign government. This bill requires certain issuers of securities to establish that they are not owned or controlled by a foreign government.
China has not officially reacted as yet, but analysts and observers are sure of a retaliation by China. It has already warned of counter measures against the suit filed against the country for Covid-19.
The ongoing trade war between the United States and China has intensified over the past few weeks. Markets are now awaiting a Chinese counterattack.
Commodity prices jumped by 1-3 per cent during the past one week on renewed hope of recovery in demand, with the huge economic stimulus seen supporting the recommencement of global infrastructure activity. The likely rebound will have its roots in the gradual opening of economies worldwide after almost three months of lockdown.
As a result, the surge in the prices of industrial commodities is temporary. Since the trade war between the two large global economies is likely to escalate, non-ferrous and ferrous metals and related raw materials are likely to remain subdued.
Commodity prices jumped marginally during the past one week on hopes of an increase in consumption in the coming months, due to the opening up of global economies after months of lockdown.
Prices of industrial commodities and energy products had declined sharply due to demand destruction since the coronavirus pandemic came to the fore in December 2019.
During this lockdown period, while mining, processing, smelting, trading, transportation were hit badly, there was large-scale destruction of demand for industrial commodities as well.