Legislation forces US firms to prepare for a Taiwan war

Some American legislators have proposed a bipartisan legislative bill that will require United States-listed firms to disclose their assets and businesses in the People’s Republic of China (PRC) and estimate the economic losses they will suffer if China invades Taiwan.

The PRC Risk Transparency Act, if passed and implemented, will amend the Securities Exchange Act of 1934 to require US-listed firms to annually disclose the percentage of total revenue, profits, capital investment and supply chain involvement in China and perform security analysis related to their exposures.

The Act will require US-listed firms to make plans for a sudden loss of market access in China if the country invades Taiwan, a self-governing island over which Beijing claims to have sovereignty and has vowed to “reunite” with the mainland.

These firms need to consider different case scenarios including a more than 80% decline in bilateral trade between the US and China, a complete cessation in the trade of goods with military end-use or dual-use applications and an extreme situation in which Beijing seizes all China-based assets of American companies that could be repurposed for military production.

The bill was jointly introduced by the House Financial Service Subcommittee on National Security, Illicit Finance and International Financial Institutions chairman Blaine Luetkemeyer and the Select Committee on the Chinese Communist Party chairman John Moolenaar on July 25.

The bill needs approval from both the US House of Representatives and Senate and the US president’s signature in order to become law.

A spokesperson of Luetkemeyer’s office told the media that another way to push the legislation is to add this Act, together with the previously