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Alibaba Group (BABA) and other Chinese stocks remained under pressure Thursday, a day after U.S. Senate passed a bill that could eventually put their U.S. exchange listings at risk. Chinese search-engine giant Baidu (BIDU) cited the Senate bill in responding to a new Reuters report that the company may pull its listing from the Nasdaq in favor of an exchange that’s closer to home.

The stakes are huge. A list compiled by the U.S.-China Economic and Security Review Commission in February 2019 included 165 U.S.-listed Chinese stocks worth more than $1.2 trillion.

U.S.-China Tensions Rising

Delistings, should it come to that, would happen after three years of noncompliance with U.S. accounting oversight rules. Yet while the bill doesn’t carry near-term consequences, its fate could provide a telling signal of where the U.S.-China relationship is headed. At the moment, things don’t look great.

The bill represents another step toward heightened tensions, adding to concern over the fate of the U.S.-China trade deal signed by President Trump in January and the trajectory of the relationship between the world’s two biggest economies.

Apart from the Senate bill, those tensions flared up Wednesday after Secretary of State Mike Pompeo congratulated Taiwanese President Tsai Ing-wen on her second inauguration. Beijing said Pompeo’s words “seriously violated” the “one-China” policy that is key to U.S.-China cooperation.

The White House hasn’t yet endorsed the bill and the House hasn’t voted on it. But it stalled last summer as President Trump was still angling for a trade deal. Swift passage now may indicate that it’s open season on China. However, the exposure of fraudulent reports by Luckin Coffee (LK) in April also offers motivation for the renewed legislative push. Now the once-hot Chinese stock faces delisting, unrelated to the Senate bill.

The Senate legislation comes amid a series of developments that could widen a rift between the U.S. and China. The Trump administration recently directed the Thrift Savings Plan, a pension plan for federal employees, not to invest in an index that includes Chinese stocks. Last week, Trump extended a ban of U.S. firms using communications equipment from firms that pose a national security risk, including Huawei.

Speaker Nancy Pelosi on Thursday said the House will “review” the Senate legislation, but stopped short of promising a vote.

Holding Foreign Companies Accountable Act

The Senate approved the Holding Foreign Companies Accountable Act by voice vote on Wednesday, without opposition. While Chinese companies aren’t the exclusive potential target, bill sponsor Sen. John Kennedy, R-La., made clear that China is its prime target.

“The Chinese Communist Party cheats, and the Holding Foreign Companies Accountable Act would stop them from cheating on U.S. stock exchanges,” Kennedy tweeted on Tuesday. “We can’t let foreign threats to Americans’ retirement funds take root in our exchanges.”

The bill authorizes the Securities and Exchange Commission to prohibit trading in a company if the Public Company Accounting Oversight Board is unable to review company audits.

The board explains on its web site, “Positions taken by Chinese authorities impede our ability to oversee PCAOB-registered audit firms in mainland China and Hong Kong. Specifically, these positions currently impair our ability to conduct inspections of the audits of public companies with China-based operations.”

If that holds for three years, the SEC could move to ban trading under the Senate bill.

Reaction Of Alibaba Stock, Other Chinese Stocks

Alibaba stock fell 2.7% to 210.91 in Thursday stock market trading, after closing slightly lower on Wednesday. Among other U.S.-listed Chinese stocks, JD.com (JD) fell 2.7%. New Oriental Education (EDU)  and Momo (MOMO) both fell more than 2% on Thursday after each losing more than 4% a day earlier.

One factor that could be affecting at least Alibaba stock and JD.com stock: Alibaba-backed shipping giant ZTO Express (ZTO) reported weaker-than-expected earnings and sales late Wednesday. ZTO stock fell sharply Thursday.

Baidu stock ticked up 0.5% after the report it might voluntarily delist from the Nasdaq.

Ahead of its fiscal fourth-quarter report on Friday, Alibaba stock slipped out of buy range. BABA stock has a 216.20 cup-with-handle buy point. Alibaba stock is trying to hold above a downward-sloping trend line from its Jan. 13 peak. That trend line offered an early entry.

Tencent Holdings (TCEHY), which is traded over the counter and isn’t listed on a U.S. exchange, fell 3.1% to 54.87, back in range above a 53.85 buy point.

Luckin Coffee stock, which resumed trading Wednesday after several weeks of being halted, has plunged by more than 50% over the past two sessions.

This article was originally published on finance.yahoo.com/news