5 Chinese state-owned companies have decided to delist from the New York Stock Exchange. More Chinese companies could follow suit. Is this the beginning of a decoupling?

Firms delisting from NYSE, companies will keep listings in Hong Kong and China

USA's Securities and Exchange Commission (SEC) has tightened the noose around Chinese tech behemoth Alibaba Group Holding Limited. Reportedly, Alibaba, on Friday, became the latest entrant into the list of Chinese companies that might be delisted by the Commission.&nbsp;

Reportedly, the US regulators have been demanding Alibaba to share its account books, stored in China, with the auditors.&nbsp;

If Alibaba is de-listed from the American market, it could be a major crisis for the company whose shares were&nbsp;down 11 per cent&nbsp;at $89.37, at the closing of the market.

These developments also come in the backdrop of founder Jack Ma, reportedly, looking to cede control of his fintech firm Ant Group Co. Ever since Ma separated Ant's assets from Alibaba more than ten years ago, he has held the reins of the company.

However, if he steps down and the SEC brings down the hammer on the delisting, it could be a double whammy for Alibaba.&nbsp;

Read More:<a href="https://www.wionews.com/world/jack-ma-intends-to-give-up-control-of-the-ant-group-wall-street-journal-501439">&nbsp;Jack Ma intends to give up control of the Ant Group: Wall Street Journal</a>

Why do Chinese companies not share their books?

It is pertinent to note that the Chinese Communist Party (CCP) does not allow Chinese companies to share their account books with overseas audit agencies.&nbsp;

Most Chinese companies have an unsaid fidelity to the CCP. Opening the books might expose the connection and thus Beijing has been overtly protective of the companies.&nbsp;

American regulatory watchdog Public Company Accounting Oversight Board (PCAOB) has the power to audit such companies. However, if the watchdog is not able to access the books for a period of three years, the company stands to be de-listed from the stock market.&nbsp;

Access to books has been a major bone of contention between Washington and Beijing. When Donald Trump was in power and amidst a major trade war with China, he employed the strategy of opening 'books' to pin down China.&nbsp;

Under the Holding Foreign Companies Accountable Act (HFCAA), over 270 Chinese companies are at the verge of being delisted from the US. However, Alibaba's delisting could be the biggest news of the lot.

(With inputs from agencies) 
 
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USA's Securities and Exchange Commission (SEC) has tightened the noose around Chinese tech behemoth Alibaba Group Holding Limited. Reportedly, Alibaba, on Friday, became the latest entrant into the list of Chinese companies that might be delisted by the Commission.

USA's Securities and Exchange Commission (SEC) has tightened the noose around Chinese tech behemoth Alibaba Group Holding Limited. Reportedly, Alibaba, on Friday, became the latest entrant into the list of Chinese companies that might be delisted by the Commission. Reportedly, the US regulators have been demanding Alibaba to share its account books, stored in China, with the auditors. If Alibaba is de-listed from the American market, it could be a major crisis for the company whose shares were down 11 per cent at $89.37, at the closing of the market. These developments also come in the backdrop of founder Jack Ma, reportedly, looking to cede control of his fintech firm Ant Group Co. Ever since Ma separated Ant's assets from Alibaba more than ten years ago, he has held the reins of the company. However, if he steps down and the SEC brings down the hammer on the delisting, it could be a double whammy for Alibaba. Read More: Jack Ma intends to give up control of the Ant Group: Wall Street Journal Why do Chinese companies not share their books? It is pertinent to note that the Chinese Communist Party (CCP) does not allow Chinese companies to share their account books with overseas audit agencies. Most Chinese companies have an unsaid fidelity to the CCP. Opening the books might expose the connection and thus Beijing has been overtly protective of the companies. American regulatory watchdog Public Company Accounting Oversight Board (PCAOB) has the power to audit such companies. However, if the watchdog is not able to access the books for a period of three years, the company stands to be de-listed from the stock market. Access to books has been a major bone of contention between Washington and Beijing. When Donald Trump was in power and amidst a major trade war with China, he employed the strategy of opening 'books' to pin down China. Under the Holding Foreign Companies Accountable Act (HFCAA), over 270 Chinese companies are at the verge of being delisted from the US. However, Alibaba's delisting could be the biggest news of the lot. (With inputs from agencies) WATCH WION LIVE HERE:

Jack Ma owned Alibaba added to the delisting watchlist by SEC

According to reports, Chinese authorities are preparing a system of intricate compliance methods to ensure&nbsp;their companies are&nbsp;not delisted by American regulators.

The Financial Times reported the move will allow US regulators to audit Chinese companies after the US insisted on transparency from Chinese and Hong Kong firms listed in the United States.

<a href="https://www.wionews.com/business-economy/us-asks-chinese-companies-to-comply-or-face-delisting-from-wall-street-461284">Also Read:&nbsp;US asks Chinese companies to comply or face delisting from Wall Street</a>

The report claimed Chinese authorities have decided to divide the US-listed companies into three categories based on the sensitivity of data. The categories include those which contain secret data, companies with sensitive data and others which hold non-sensitive material.

In May, shareholders of Chinese ride-hailing giant Didi Global had voted to delist the company in New York after Chinese authorities had&nbsp;launched cybersecurity investigations against the company. Many Chinese companies listed in the US, including Alibaba, have opted to hold&nbsp;initial public offerings in Hong Kong as American authorities have stepped up scrutiny of Chinese firms.

Watch:&nbsp;US government blacklists Xiaomi and 8 other Chinese companies

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The FT report claimed Chinese officials have discussed plans on whether companies in the sensitive data category could restructure operations to comply with US regulations as Bejing seeks to give US auditors more information on companies listed in the United States.

China has often refused to divulge details on companies citing national security issues. US officials have insisted that Chinese firms should give information about their operations to auditors or risk being delisted with mass delisting on the anvil in 2024 if Chinese firms do not comply.

(With inputs from Agencies)

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According to reports, Chinese authorities are preparing a system of intricate compliance methods to ensure their companies are not delisted by American regulators.

According to reports, Chinese authorities are preparing a system of intricate compliance methods to ensure their companies are not delisted by American regulators. The Financial Times reported the move will allow US regulators to audit Chinese companies after the US insisted on transparency from Chinese and Hong Kong firms listed in the United States. Also Read: US asks Chinese companies to comply or face delisting from Wall Street The report claimed Chinese authorities have decided to divide the US-listed companies into three categories based on the sensitivity of data. The categories include those which contain secret data, companies with sensitive data and others which hold non-sensitive material. In May, shareholders of Chinese ride-hailing giant Didi Global had voted to delist the company in New York after Chinese authorities had launched cybersecurity investigations against the company. Many Chinese companies listed in the US, including Alibaba, have opted to hold initial public offerings in Hong Kong as American authorities have stepped up scrutiny of Chinese firms. Watch: US government blacklists Xiaomi and 8 other Chinese companies The FT report claimed Chinese officials have discussed plans on whether companies in the sensitive data category could restructure operations to comply with US regulations as Bejing seeks to give US auditors more information on companies listed in the United States. China has often refused to divulge details on companies citing national security issues. US officials have insisted that Chinese firms should give information about their operations to auditors or risk being delisted with mass delisting on the anvil in 2024 if Chinese firms do not comply. (With inputs from Agencies) WATCH WION LIVE HERE You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here.

China planning new strategy to avoid US delistings: Report

China warned on Monday of instability in international markets from any "decoupling" of China and the <a href="https://www.wionews.com/world/giuliani-says-trump-did-not-pay-for-his-push-for-biden-probe-252746">United States</a>, after sources said the Trump administration was considering delisting Chinese companies from US&nbsp;stock exchanges.

US&nbsp;President Donald Trump's administration is considering the move, three sources briefed on the matter said on Friday, in what would be a radical escalation of US-China trade tensions.

It would be part of a broader effort to <a href="https://www.wionews.com/world/trump-considers-delisting-chinese-firms-from-us-markets-sources-252565">limit US&nbsp;investment in Chinese companies</a>, two of the sources said. One said it was motivated by the Trump administration's growing security concerns about the companies' activities.

Chinese Foreign Ministry spokesman Geng Shuang said he had noted the reports on delisting and the response from the US&nbsp;Treasury, which said there were no plans to block Chinese listings "at this time".

China-US&nbsp;trade and financial cooperation is mutually beneficial, Geng told a daily news briefing.

"Exerting maximum pressure and even seeking the forced decoupling of China-US&nbsp;relations will harm the interests of Chinese and American companies and people, create turmoil in financial markets, and endanger global trade and economic growth," he added.

"This does not accord with the interests of the international community", he further said.

Geng said he hoped the <a href="https://www.wionews.com/world/like-every-american-i-deserve-to-meet-my-accuser-donald-trump-252710">United States</a> would work with China to deepen economic and financial cooperation, and that the United States would take a "constructive attitude" toward resolving differences.

The United States and China have been locked in an escalating trade war for over a year. They have levied punitive duties on hundreds of billions of dollars of each other's goods, roiling financial markets and threatening global growth.

In June, US&nbsp;lawmakers from both parties introduced a bill to force <a href="https://www.wionews.com/world/hong-kong-clashes-as-china-70th-anniversary-celebrations-near-252714">Chinese companies</a> listed on American stock exchanges to submit to regulatory oversight, including providing access to audits, or face delisting.

Chinese authorities have long been reluctant to let overseas regulators inspect local accounting firms - including member firms of the Big Four international accounting networks - citing national security concerns.

China and the United States are due to resume high-level talks next week in Washington on their increasingly bitter trade war.

China hopes Beijing and Washington will resolve their trade dispute "with a calm and rational attitude", Vice Commerce Minister Wang Shouwen, who has been part of China's negotiating team, said on Sunday.

China warned on Monday of instability in international markets from any "decoupling" of China and the United States, after sources said the Trump administration was considering delisting Chinese companies from US stock exchanges.

China warned on Monday of instability in international markets from any "decoupling" of China and the United States, after sources said the Trump administration was considering delisting Chinese companies from US stock exchanges. US President Donald Trump's administration is considering the move, three sources briefed on the matter said on Friday, in what would be a radical escalation of US-China trade tensions. It would be part of a broader effort to limit US investment in Chinese companies, two of the sources said. One said it was motivated by the Trump administration's growing security concerns about the companies' activities. Chinese Foreign Ministry spokesman Geng Shuang said he had noted the reports on delisting and the response from the US Treasury, which said there were no plans to block Chinese listings "at this time". China-US trade and financial cooperation is mutually beneficial, Geng told a daily news briefing. "Exerting maximum pressure and even seeking the forced decoupling of China-US relations will harm the interests of Chinese and American companies and people, create turmoil in financial markets, and endanger global trade and economic growth," he added. "This does not accord with the interests of the international community", he further said. Geng said he hoped the United States would work with China to deepen economic and financial cooperation, and that the United States would take a "constructive attitude" toward resolving differences. The United States and China have been locked in an escalating trade war for over a year. They have levied punitive duties on hundreds of billions of dollars of each other's goods, roiling financial markets and threatening global growth. In June, US lawmakers from both parties introduced a bill to force Chinese companies listed on American stock exchanges to submit to regulatory oversight, including providing access to audits, or face delisting. Chinese authorities have long been reluctant to let overseas regulators inspect local accounting firms - including member firms of the Big Four international accounting networks - citing national security concerns. China and the United States are due to resume high-level talks next week in Washington on their increasingly bitter trade war. China hopes Beijing and Washington will resolve their trade dispute "with a calm and rational attitude", Vice Commerce Minister Wang Shouwen, who has been part of China's negotiating team, said on Sunday.

On US' delisting threat, China says 'decoupling' would harm both sides

A bipartisan legislation was introduced in the Congress which will increase oversight of <a href="https://www.wionews.com/world/chinas-xi-says-economy-positioned-to-meet-all-challenges-report-224401">Chinese and other foreign firms</a> listed on US exchanges and allow delisting those companies who do not comply with the regulations.

A bipartisan group of four powerful Senators introduced the legislation in the Senate on Wednesday while another group of three US Representatives tabled the companion bill in the US House of Representatives.

The <a href="https://www.wionews.com/business-economy/world-bank-slashes-global-growth-forecast-amid-deepening-us-china-trade-conflict-224398">legislation--Ensuring Quality Information </a>and Transparency for Abroad-Based Listings on our Exchanges (EQUITABLE) Act--will force the Chinese government, which currently blocks US regulators from viewing the full audit reports of publicly traded companies headquartered in Hong Kong and mainland China, to change behaviour, the lawmakers said in a joint statement.

It will better inform investors about their exposure to financial risks, delist non-compliant issuers of securities, and ban Chinese and other foreign firms that flaunt investor protection and regulatory norms from entering the US capital markets, the statement said.

According to the US-China Economic and Security Review Commission there are 156 Chinese companies, including 11 state-owned-enterprises, that are listed on America's three largest exchanges with a combined market capitalisation of $1.2 trillion.

"The Chinese Communist government consistently manipulates the law and our regulations to protect their companies from being held to basic global accounting standards, creating unfair advantages and further encouraging corrupt behaviour," Republican Representative from Texas Mike Conaway said.

The EQUITABLE Act is simple: any Chinese company who wishes to be listed on the US stock exchanges, or access US capital, should be required to comply with the US laws on financial transparency, he said.

"Beijing shows no apprehension while obstructing attempts to audit Chinese companies or breaking US laws. Without the EQUITABLE Act, the Chinese government will only escalate this malicious pattern of conduct," Conaway said.

Republican Senator Marco Rubio said Beijing should no longer be allowed to shield the US-listed Chinese companies from complying with American laws and regulations for financial transparency and accountability.&nbsp;

"If China-based companies want to list on stock exchanges or access capital markets in the US, we should make them comply with American laws," he said. 
The EQUITABLE Act makes it clear that there is a price for the Chinese government and Communist Party's disregard for the rules of responsible economic and financial engagement in international capital markets, Rubio said.

Democrat Senator Robert Menendez demanded that it's time for China's government and companies to play by the same rules as American companies in US financial markets. The new legislation would ensure that foreign companies comply with the US accounting regulations.

"This will stop Chinese firms from hiding behind the Communist Party's efforts to take advantage of our capital markets by withholding accounting information. US investors trust that both foreign and domestic publicly-listed firms are held to the same standard ? and the EQUITABLE Act will make it so," Menendez said. 
Republican Senator Tom Cotton alleged the Chinese Communist Party shields its prized companies from financial audits and accountability, yet the US still allows those companies to be traded on the US stock exchanges.

"If foreign companies want to stay on American exchanges, they need to abide by the same rules everyone else does. Our bill would ensure that foreign companies traded on US stock exchanges provide regulators with information already required by law," he said.

"Chinese firms should not be allowed to play by a different set of rules than American companies, yet they are currently allowed to operate on our stock exchanges without the same oversight that the US companies have to comply with," New York Democratic Senator Kirsten Gillibrand said.

Americans deserve full transparency about the companies listed on the US stock exchanges, she asserted.&nbsp;

"If China refuses to comply with international norms of transparency, then its companies should not have access to the US market," she said. 
If Chinese companies, or any other foreign firm, want to list on the US stock exchange, they need to follow US financial laws, demanded Democrat Representative Tim Ryan. 
The Chinese government's continued attempts to undermine US laws is appalling and displays a pattern of disrespect to the US. Congress needs to put an end to this, he said.

In December 2018, the Securities and Exchange Commission and the Public Company Accounting Oversight Board (PCAOB) issued a joint warning to investors about the challenges American regulators face when attempting to conduct oversight of US-listed companies whose operations are based in China and Hong Kong.

A bipartisan legislation was introduced in the Congress which will increase oversight of Chinese and other foreign firms listed on US exchanges and allow delisting those companies who do not comply with the regulations.

A bipartisan legislation was introduced in the Congress which will increase oversight of Chinese and other foreign firms listed on US exchanges and allow delisting those companies who do not comply with the regulations. A bipartisan group of four powerful Senators introduced the legislation in the Senate on Wednesday while another group of three US Representatives tabled the companion bill in the US House of Representatives. The legislation--Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges (EQUITABLE) Act--will force the Chinese government, which currently blocks US regulators from viewing the full audit reports of publicly traded companies headquartered in Hong Kong and mainland China, to change behaviour, the lawmakers said in a joint statement. It will better inform investors about their exposure to financial risks, delist non-compliant issuers of securities, and ban Chinese and other foreign firms that flaunt investor protection and regulatory norms from entering the US capital markets, the statement said. According to the US-China Economic and Security Review Commission there are 156 Chinese companies, including 11 state-owned-enterprises, that are listed on America's three largest exchanges with a combined market capitalisation of $1.2 trillion. "The Chinese Communist government consistently manipulates the law and our regulations to protect their companies from being held to basic global accounting standards, creating unfair advantages and further encouraging corrupt behaviour," Republican Representative from Texas Mike Conaway said. The EQUITABLE Act is simple: any Chinese company who wishes to be listed on the US stock exchanges, or access US capital, should be required to comply with the US laws on financial transparency, he said. "Beijing shows no apprehension while obstructing attempts to audit Chinese companies or breaking US laws. Without the EQUITABLE Act, the Chinese government will only escalate this malicious pattern of conduct," Conaway said. Republican Senator Marco Rubio said Beijing should no longer be allowed to shield the US-listed Chinese companies from complying with American laws and regulations for financial transparency and accountability. "If China-based companies want to list on stock exchanges or access capital markets in the US, we should make them comply with American laws," he said. The EQUITABLE Act makes it clear that there is a price for the Chinese government and Communist Party's disregard for the rules of responsible economic and financial engagement in international capital markets, Rubio said. Democrat Senator Robert Menendez demanded that it's time for China's government and companies to play by the same rules as American companies in US financial markets. The new legislation would ensure that foreign companies comply with the US accounting regulations. "This will stop Chinese firms from hiding behind the Communist Party's efforts to take advantage of our capital markets by withholding accounting information. US investors trust that both foreign and domestic publicly-listed firms are held to the same standard ? and the EQUITABLE Act will make it so," Menendez said. Republican Senator Tom Cotton alleged the Chinese Communist Party shields its prized companies from financial audits and accountability, yet the US still allows those companies to be traded on the US stock exchanges. "If foreign companies want to stay on American exchanges, they need to abide by the same rules everyone else does. Our bill would ensure that foreign companies traded on US stock exchanges provide regulators with information already required by law," he said. "Chinese firms should not be allowed to play by a different set of rules than American companies, yet they are currently allowed to operate on our stock exchanges without the same oversight that the US companies have to comply with," New York Democratic Senator Kirsten Gillibrand said. Americans deserve full transparency about the companies listed on the US stock exchanges, she asserted. "If China refuses to comply with international norms of transparency, then its companies should not have access to the US market," she said. If Chinese companies, or any other foreign firm, want to list on the US stock exchange, they need to follow US financial laws, demanded Democrat Representative Tim Ryan. The Chinese government's continued attempts to undermine US laws is appalling and displays a pattern of disrespect to the US. Congress needs to put an end to this, he said. In December 2018, the Securities and Exchange Commission and the Public Company Accounting Oversight Board (PCAOB) issued a joint warning to investors about the challenges American regulators face when attempting to conduct oversight of US-listed companies whose operations are based in China and Hong Kong.

US lawmakers introduce legislation to push US-listed Chinese firms to comply with financial oversight

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