US legislators might support a bill to force Chinese firms listed in the US to let the US stock regulators, the PCAOB, check their files. But those checks will not prevent frauds like those by Luckin as some US senators claim, warns audit expert Paul Gillis on his weblog Chinaaccountingblog. Some predictions on what will happen after the bill has been adopted.
China has been banning US regulators at the PCAOB from getting access to information of Chinese companies at US stock markets, as they should do according to US regulations to protect its state secrets. But things are changing, notes auditing expert Paul Gilles at his weblog Chinaaccountingblog. “I suspect that Yi’s comments are a signal that China will back down on this issue, allowing joint inspections with adequate controls to protect state secrets,” writes Gillis.
Chinese listings at US stock markets got recently under fire. Former US assistant trade representative Harry Broadman looks with some amazement at this market at the International Finance Law Review (IFLR). “After decades of working in China intensively on financial accounting, there is not a single state-owned enterprise I’ve worked on that I can think of that abided by international accounting standards,” Broadman says.
The threat to delist Chinese companies from US stock exchanges has shocked observers, even though it is not yet clear whether the White House is moving forward. Financial analyst Sara Hsu warns the reputation of US financial institutions might be at stake. And also: her latest viewpoint on what the consumers might feel from the ongoing trade war.
The tech giant Alibaba listing on the Hong Kong stock market is already a sign things are changing for the US markets, and the ongoing trade war will stop many Chinese firms to list in the US, as they did in the past, especially when a bill by US Senator Marco Rubio is adopted or not, says Beida accounting professor Paul Gillis in Forbes.
US Senator Marco Rubio is drafting a law, the Equity Act, to kick out Chinese companies from US stock markets, unless they comply with the oversight by the Public Company Oversight Board (PCOB) of their information. Beida accounting professor Paul Gillis believes this act might be passed, and although it is not the hottest issue in the ongoing trade war between China and the US, companies will have three years to move, for example to Hong Kong, he writes in the Chinaaccountingblog.
Controlling shareholders have been caught for criminal activities everywhere, but there are a few reasons to give their backgrounds extra caution in China, says business analyst Shaun Rein, author of The War for China’s Wallet: Profiting from the New World Order to the South China Morning Post.
Two financial regulators in the US, the SEC and the PCAOB, have joined the trade war of their country and combined it with their struggle for better accounting practices in China, writes Beida accounting professor Paul Gillis at his weblog. While the complaints are not new or surprising, he wonders about the timing, Gillis adds.
Figuring out who might be hurt by the trade war between China and the US is still be tough, but tech companies like Alibaba and Tencent see their US ties as a liability, says financial expert Sara Hsu to Cheddar. “The trade spat between Washington and Beijing has not only quelled investors’ appetites, it has also discouraged Chinese tech giants from expanding internationally.”