I have a Chinese American friend working for a top U.S. tech company, in a finance area of the company, and he makes a number of trips to China every year. He has always told me, as an American finance person with experience in China, that you can trust the financial statements of Chinese companies, whether “private” or government enterprises. They have been so use to “making things look good” for the higher ups for so long, that everyone continues to doctor the books and financial statements.
I have another Chinese-American friend (just very recently got her American citizenship) who works in arranging capital investments. She did it here in the U.S., and moved back to China for a while to do the same in China. She gave it up and came back to the U.S.; so many deals went bad because so many people lied; then she pissed off some party flak who did not like her failure to promote deals she did not believe in.
NOBODY in China makes it really big on their own. Behind them somewhere, is a silent partner, a major stockholder/stockholders, board member(s), or “investors” who are some big mucky mucks in government or the party (there is only one party in China).
I think you meant “that you CAN’T trust the financial statements”.