China’s securities regulator said the country will conduct the audit approval reached between the Biden Administration and Xi Jinpings government last week.
What happened: Fang Xinghai, Vice Chairman of Chinese securities regulator (CSRC) told a forum that China will step up communication with foreign investors, Reuters reported.
“We will implement the Sino-US cooperation agreement on cross-border audit supervision well and further strengthen communication with foreign institutional investors,” Fang said.
This comes after the world’s two leading economies signed a pact last week allowing American accountants to visit Hong Kong to review the audit records of Chinese companies listed on US stock exchanges.
The deal was a relief for US-listed Chinese companies, investors and exchanges. Previously, the dispute could have led to a ban of 200 Chinese companies from US stock exchanges. The US Securities and Exchange Commission had previously identified around 200 endangered companies, including Holdings of the Alibaba Group BABA, JD.Com Inc JDand Nio Inc NEVER.
Meanwhile, legal experts and analysts remain skeptical and have warned the two sides could still disagree over how the deal will be interpreted and implemented.
“My instinct is that now that China has signaled that it wants to avoid a mass delisting, things will work out in the end.” Drew amberCo-Chairman of Marcum Asia Chartered Accountant LLPsaid the publication.
“But expect some bumps in the road and barrels of midnight oil being burned before they get there,” he added.
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