Accounting showdown
China and the US are in a stand-off that could lead to the delisting of Chinese companies on US stock exchanges and spark a tit-for-tat action
Without much public fanfare or even awareness except in the gloomy world of bean-counting accountants, China and the United States have embarked on yet another business collision course. Patrick Chovanec, the respected Tsinghua University-based American academic asks whether they can avert an "accounting Armageddon".
Paul Gillis, a professor of accounting at Peking University and author of the China Accounting Blog, also sees the risk of conflict growing, and puts the odds of wholesale Chinese corporate delistings from the US at 80 per cent, whereas in June he thought the chances were only 20 per cent.
He believes that for China the issue involves the sensitive red line of "national sovereignty". There is potential room for a compromise solution, but it would involve the political and securities regulators in both countries behaving in a mature and global-minded way.
This is not a footnote in the accounts but a big deal that goes to the heart of the role that China would, could and should play in a globalising world.