I think that this just legitimate. Chinese companies listed in the US stock exchanges cant expect to be exempt from the PCAOB, when the US companies have to. Doesnt make sense.
Chinese Economics Thread
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I think that this just legitimate. Chinese companies listed in the US stock exchanges cant expect to be exempt from the PCAOB, when the US companies have to. Doesnt make sense.
It's all boil down to economics. Don't forget, dispite China catching up with the US in absolute term, China is still a relative poor country. It wasn't that long ago, people were still struggling to feed their families etc.
Education has a cost. Not every country could afford free education. Heck, in the relatively rich place like the UK. Education is only compulsory up to 15 years of age as recent as around 20 years ago. (My elderly golfing buddy said he left school at 14, because it was 14 then). Even today, it is compulsory only up to 18/19.
In Hong Kong, (in the old days, not aure about now) under the "glorious British rule" that those thugs wanted to go back to. Education was not free. But subsidise, particularly by the Christian churches. To get in, you just have to convert. Which is how they managed to get the converts.
So even under the rich first world country, education is rationed through price and privilege. China hasn't done too badly when all things considered.
Don't you love this. US put itself as the capitalist paradise. Land of the free. Blah blah blah. Should retort to interventionism at every turn. Well it is their lost. They think they are doing the Chinese companies favours by providing finance. But it's a two way street, they only provide finance because they hope to profit from it.
As such, they are shutting themselves out of potentially substantial profits. Also, the stock market is supposed to be a free market place. Governed by stock market rules, why should the U.S. government intervene? Talk about political move to slow Chinese companies growth. So much for free market that US preaches the rest of the world about!
TBH, the delist happens if there is a failure to comply for 3 consecutive years, so we wouldn't really see any impact until 2024. Who knows what the world will be like then?
Chinese companies should list in the Shanghai, Shenzhen or Hong Kong stock market. Not do their IPO in US.
Firstly, many countries have initially resisted from allowing the PCAOB to go to their countries to inspect due to national sovereignty concerns or privacy concerns. It is not just China.
Secondly, allowing a foreign regulator to come to your country to enforce foreign law on your soil against your people is a violation of sovereignty. China isn't one of those countries that easily give up its sovereignty.
Thirdly, audit work paper can contain state secret as these listed companies would have transactions with state companies.
Lastly, the US has implemented law such as FATCA (The Foreign Account Tax Compliance Act) requiring foreign financial institutions to report any customers that have connection to the U.S through birth or prior residency in the U.S to the US treasury. On the other hand, the US doesn't allow reciprocity. Legitimacy or fair is never the primary consideration of the US.
yeah no kidding... hence why the reigning hegemon is so wary of China catching up and surpassing it would lose those exorbitant privileges
Not only should Chinese companies list in Shanghai and Shenzhen, but China should attract other foreign companies from the Belt & Road to list in Shanghai and Shenzhen. China should develop Shanghai and Shenzhen as international financial centers rivaling London and New York.
Does the US allow foreign auditors to come in and audit american companies listed abroad?