US-China talks on delistings advance with Hong Kong inspections
- Chinese stocks in the US surge upon news of a plan for American inspectors travel to the city to review businesses’ audit documents
- Such a move would be a major step toward alleviating fears of mass forced delisting of US-listed Chinese stocks
Talks between Beijing and Washington to avoid the delisting of about 200 companies from New York stock exchanges are gaining steam with a plan to let American inspectors travel to Hong Kong to review Chinese businesses’ audit documents.
Chinese regulators have instructed major accounting firms to prepare to bring the audit work papers of the US-listed Chinese companies to Hong Kong, where they can be reviewed by the Public Company Accounting Oversight Board, according to a person who asked not to be identified as the discussions are private.
The conversations, which remain ongoing, could result in a significant advance in a years-long stand-off over the inspections, which are required for all US-traded companies.
The clock is ticking to avoid a congressionally imposed deadline of 2024 for kicking off businesses that do not comply from the New York Stock Exchange and Nasdaq.
The Nasdaq Golden Dragon Index, which tracks Chinese firms trading in the US, surged the most in more than two months after The Wall Street Journal reported on the discussions earlier on Thursday.