The SEC and U.S. Securities and Exchange Commission have turned their regulatory radar on China and are considering a potential ban of Chinese companies from U.S. stock markets for failing to comply with auditing rules and regulations. The move would be another giant step toward a conscious decoupling between the countries.
The scrutiny follows President Trump’s executive order, banning U.S. investment in several companies linked to the Chinese military and has sent the China Communist Party into a panic. The SEC intends to propose a regulation by the end of the year that would delist Chinese companies from the stock exchanges who are not in compliance with U.S. auditing rules.
The move would be catastrophic for the companies and the Chinese economy in general. There are more than 200 Chinese companies on U.S. stock exchanges, with a combined market cap of $2.2 trillion. This year alone, Chinese companies have raised $12 billion in initial public offerings, all while essentially ignoring U.S. law. According to the Wall Street Journal, tens of billions of dollars in U.S. market value have disappeared as more than 170 U.S.-listed Chinese companies have faced scrutiny for embezzlement, theft, misrepresentation and other alleged abuses.
Fang Xinghai, vice-chairman of China’s Security Regulatory Commission, said they are desperately hoping to resolve the problem with a Joe Biden Administration. We shall see. Here’s more with Chris Chappell on China Uncensored.
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