Posted on 09/25/2019 5:32:18 PM PDT by Zhang Fei
Two decades after its accession to the World Trade Organization, China still uses its intertwined public and private sectors to serve the Communist Party’s mercantilist goals. Many Chinese businesses are listed on U.S. stock exchanges, but Beijing’s intransigence ensures that American investors often don’t get a true picture of those companies’ financial health.
In December 2018, the Securities and Exchange Commission and the Public Company Accounting Oversight Board issued a joint warning to investors about the challenges American regulators face when attempting to conduct oversight of U.S.-listed companies based in China and Hong Kong. While the PCAOB regularly inspects audits of U.S.-listed firms, Beijing consistently challenges their efforts. Chinese law requires that financial records remain in China, and Beijing restricts access to accounting information, citing national security and state secrecy.
Chinese practices raise real risks of fraud. They also undermine the fair and transparent financial reporting at the heart of American capital markets. In their December 2018 joint statement, the SEC and PCAOB acknowledged that “for investors—both U.S. and non-U.S. investors—a U.S. listing carries with it the assumption that U.S. rules and regulatory oversight apply.” When it comes to Chinese companies, that simply isn’t true.
The U.S.-China Economic and Security Review Commission identified 156 Chinese companies, including 11 state-owned-enterprises, that are listed on America’s three largest exchanges. Their combined market capitalization of $1.2 trillion means that significant American capital is exposed to the risk created by China’s lack of economic transparency.
The U.S. can no longer accept a two-tiered system, which is why I’m introducing the Equitable Act—an acronym for Ensuring Quality Information and Transparency for Abroad-Based Listings on our Exchanges—to ensure that all companies on American stock exchanges are subject to the same standards and regulations.
When the Equitable Act becomes law, foreign companies that don’t make their
(Excerpt) Read more at wsj.com ...
Busted clock bump for micro.
How about if they don’t comply, they aren’t listed on the exchange?
Is that more difficult than alphabetizing a chinese dictionary?
Amazing that this is hung up.
Gonna write my Representative.
BTW my old (Dem) Rep is now a paid lobbyist for Huawai LOL!
Funny how that works...
And then there’s that whole abacus thing...
First hand experience dealing with Chinese is that you do your own audit.
I mean, just for example their lousy firedrills.
Everyone running around in circles, nothing gets done.
The second biggest accounting/auditing firm in China was busted by the Chinese Government a few months ago, and a lot of offerings they had certified were suspended.
The gist was that fraud was the norm, rather than the exception.
They were not busted because the police were hot on ferreting out fraud - they were busted because they ran afoul higher ups in the Government/Party.
Listing firms on Western stock exchanges is a conscious fraud that the ChiCom Government encourages, to raise real hard currency.
We should disentangle as much as we can from them financially, in an orderly manner, before the bubble bursts, and more is lost.
While an open borders zealot, Little Marco’s not completely useless. This bill, however, has been in limbo since it was introduced almost 4 months ago.
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Your linked site says it has a 3% chance of enactment. With Mitch McConnell being the Senate majority leader I give it about 1/10 of 1% of being enacted owing to family connections.
Tough people to negotiate with also. Tough.
But, but, but, the Ukraine?!?
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