Beijing and Washington reached a preliminary agreement that will allow US authorities to review audit documents of Chinese companies operating on the US stock market, a first step to prevent nearly 200 Chinese firms from delisting on the New York Stock Exchange. .
As part of the deal, China will allow inspectors from the Public Enterprise Accounting Oversight Board (PCAOB) access to working documents and audit staff, according to statements issued Friday by regulators in China and the United States. They added that US inspectors plan to be on the ground in mid-September.
The deal marks a major step forward in resolving a decades-long impasse between the two superpowers over access to audit documents. This dispute has become a major point of conflict since a US law was passed in 2020 stating that companies whose work documents cannot be reviewed risk being expelled from US stock exchanges.
China and Hong Kong are the only two places in the world that have not allowed PCAOB inspections, citing national security and confidentiality concerns. The deal announced Friday represents a rare compromise by Beijing, which has repeatedly promised to bolster market confidence while balancing national security concerns with the needs of business.
“This agreement marks the first time we have received such detailed and specific commitments from China that would allow PCAOB inspections and investigations to meet US standards,” the Securities and Exchange Commission (SEC) chairman said in a statement. in English), Gary Gensler.
The China Securities Regulatory Commission said it is possible to prevent companies from leaving the stock market if the cooperation can meet the demands of both sides.
Talks between Beijing and Washington accelerated after state-owned companies including China Life Insurance, PetroChina and China Petroleum & Chemical said on August 12 that they planned to delist their shares on US stock exchanges. Meanwhile, companies like Alibaba intend to go public with a primary offering in Hong Kong.