The U.S. and China agreed to guarantee the U.S. authority to investigate accounting information of Chinese companies listed on the New York Stock Exchange.
Chinese companies, which are on the verge of being kicked out of the U.S. stock market, have gained a chance to remain in the market with the agreement, but labor is expected in the future as the U.S. and China offer different interpretations of the agreement.
U.S. May Investigate Chinese Companies Without Prior Consultation
According to CNN and other U.S. media on the 28th, the U.S.-listed corporate accounting supervisory board and the China Securities Supervisory Board agreed to provide data from Chinese accounting firms that audited Chinese companies listed on the New York stock market to U.S. regulators.
Under the agreement, U.S. regulators can select targets for investigation and conduct investigations without prior consultation with Chinese authorities, and, if necessary, interview Chinese business officials or collect testimonies.
Until now, the U.S. has insisted on directly auditing the accounts of Chinese companies listed on the New York Stock Exchange. On the other hand, China has opposed the U.S. authorities’ audit of its companies on the grounds that national security could be violated.
In response, the U.S. introduced a “foreign company reprimand law” that allows foreign companies to be expelled for three consecutive years in 2020, and 163 companies, including Alibaba and Baidu, were on the preliminary list for delisting out of 270 Chinese companies listed on the New York Stock Exchange. With the agreement between the U.S. and China, all Chinese companies listed on the New York Stock Exchange will be able to secure residual vaporization in the market.
The U.S. side gave meaning to the agreement, saying that market access measures have been improved.
