In August, the United States and China reached an agreement on the audit and supervision of Chinese concept stocks. However, SEC Chairman Gary Gensler warned that Chinese stocks are still at risk of being delisted. About 200 Chinese companies currently listed in the U.S. are at risk of being removed from U.S. exchanges.

The Chinese regime and the U.S. are wrangling over audit supervision of Chinese stocks in Hong Kong. Some people said that the CCP asked the auditors to amend some details without affecting the progress of the overall audit.

The U.S. Public Company Accounting Oversight Board (PCAOB) has sent two teams to Hong Kong to test China’s commitment.

Erica Williams, PCAOB chair, said that the agency is urgently working to determine by the end of the year whether the terms of the agreement have been met.

Chinese regulators hold nightly meetings to prepare documents required by the U.S. However, the U.S. pointed out that the presence of Chinese officials prevented them from accessing audit documents and the people involved. In addition, the U.S. must have full access to unabridged records.

In 2002, U.S. law mandated inspections of listed companies, but the Chinese regime refused on national security grounds. In 2020, the U.S. threatened to expel Chinese companies, forcing the CCP to compromise.

As of the end of July, the SEC included 159 Chinese concept stocks for delisting.

In August, China allowed U.S. regulators to review audit working papers of U.S.-listed Chinese companies for the first time in 20 years. However, many people rate the risk of breaking the deal as very high. About 200 Chinese companies, including Alibaba and NetEase, will risk being removed from the New York Stock Exchange.

Chinese regulators fear the company’s vast trove of data could be exposed to foreign agencies. Five large state-owned companies announced plans to delist in the first two weeks of the August deal.

Ride-hailing giant Didi Global was forced to delist under pressure from Chinese regulators.

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