Beijing and Washington reached a preliminary agreement that would allow US officials to review audit documents of Chinese companies doing business with the United States. With the decision, about 200 Chinese companies such as Alibaba Group, JD.Com Inc and NIO Inc could be listed on the New York Stock Exchange.
The deal is a significant step forward for US regulators who have for more than a decade sought access to audit documents from Chinese companies listed on US stock exchanges.
For more than a decade, Beijing has refused to allow foreign regulators to inspect accounting firms, citing security concerns. According to the Public Company Accounting Oversight Board (PCAOB), the positions taken by Chinese authorities “completely impede the PCAOB’s ability to inspect and investigate public accounting firms registered in China and Hong Kong.” The board said the agreement with China was the most comprehensive and prescriptive agreement ever made.
Lynn Martin, president of the New York Stock Exchange, emphasized the importance of the preliminary agreement. “This agreement is an important development for the global economy and our U.S. capital markets, which are important in large part because of our ability to balance investor protection and access to the world’s leading institutions,” Martin said.
The deal comes amid tensions between Washington and Beijing over US House Speaker Nancy Pelosi’s visit to Taiwan. This was not welcomed by the Chinese authorities.
Image: Studio Romantic/Shutterstock
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