China, US working toward effective audit supervision cooperation: report
Positive progress seen, but political uncertainties remain: expert
Published: Mar 27, 2022 10:28 PM
stock market Photo:VCG

stock market Photo:VCG

 Chinese and US regulators are working toward the same direction to resolve their differences over audit issues of Chinese firms listed in the US and achieve effective and sustainable securities supervision cooperation as soon as possible, the official China Securities Journal newspaper reported on Sunday.

The report came as Chinese officials have in recent days signaled that positive progress has been made in talks with US regulators over the matter, which has great implications for US-listed Chinese companies. But despite positive progress, political disruptions in the US still pose uncertainties, analysts noted. 

"Chinese and US regulators are fully aware of each other's concerns and are working toward effective and sustainable cooperation as soon as possible. This is in the best interests of both countries' capital markets and global investors," according to the China Securities Journal report, which cited a person close to China's securities regulator.

China Securities Regulatory Commission (CSRC) on Sunday held a video conference, where several US-listed Chinese companies and investment institutions participated and exchanged views about recent developments in the market.

The CSRC didn't disclose the details of the negotiating progress with its US counterpart but confirmed that both sides have shown a positive willingness and pragmatic attitude to solve the problem and have carried out efficient, frank and professional consultations, the China Securities Journal reported.

The CSRC also reminded market watchers to follow the information publicly disclosed by the regulatory authorities of both sides instead of blindly following misleading market rumors.

Judging from the CSRC's statement, talks about China-US securities supervision cooperation is progressing, Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at Renmin University of China, told the Global Times on Sunday.

"However, uncertainties remain as some political forces in the US have sought to politicize capital market supervision and demanded long-arm jurisdiction," Dong said.

Separately, the CSRC is actively supporting local companies to list in the US.

After communication and coordination with regulatory authorities in the relevant industries, the CSRC recently issued no-objection responses to applications by several companies, including ZKH Industrial Supply, to list in the US as regulatory authorities have continued efforts to support qualified enterprises to list overseas and keep overseas listing channels unblocked, Chinese financial news outlet reported on Sunday.

This marks the first no-objection response by the CSRC since the meeting of the State Council's Financial Stability and Development Committee on March 16, which has given US-traded Chinese stocks a much-needed confidence boost.

The meeting stressed that Chinese and US regulators have maintained good communication and achieved progress on forming specific cooperation mechanisms to resolve pressing concerns, and the Chinese government would continue to support all types of enterprises to list overseas.

"It showed China's efforts to remain committed to reform and opening-up have not changed, despite the US' deliberate crackdown on Chinese companies listed in the US. It is hoped that the Chinese and US market regulators will strengthen cooperation and resolve differences through communication," Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times on Sunday.

"If Chinese stocks are forced to delist, it will be detrimental to both China and the US and will have a negative impact on the international image of the US capital market," Dong Dengxin said.

In December, the CSRC unveiled draft rules to further advance supervision of the direct and indirect overseas listing activities of domestic enterprises with unified filing management. 

The CSRC has stressed that improving the supervisory framework does not represent a tightening of policies regarding overseas listings, and it is a necessary step in facilitating China's systemic high-level opening-up. 

"Looking to the future, China's direction of opening-up will not change, neither will its attitude of supporting companies using the two resources," the CSRC said, adding that its attitude of respecting companies' ability to voluntarily choose their listing markets is clear, coherent and has never been shaken.