Three of China’s biggest state-owned companies announced on Friday their intention to delist from the US stock market, as the two countries struggle to find common ground on how US regulators will scrutinize the data of Chinese companies.
China Life Insurance, PetroChina and China Petroleum & Chemical have revealed their intention to delist from the US stock market, while Aluminum Corp is following suit. of China and Sinopec Shanghai Petrochemical.
The U.S. and China have clashed for two decades over whether to allow American investigators to audit the accounting records of Chinese companies. The negotiators of the two sides, as noted by the Bloomberg agency, have so far been unable to reach an agreement, while the US Congress has set a deadline of 2024 for mandatory delisting from the US stock exchanges of companies that do not comply with the country’s institutional framework.
Mainland China and the semi-autonomous Chinese city-state of Hong Kong are the only jurisdictions in the world that do not accept oversight by the US Listed Companies Accounting Oversight Board, citing concerns about national security and confidentiality issues.
“These state-owned companies are in strategic industries and have access to information and data that the Chinese government has strong reservations about sharing with foreign regulators,” notes Redmond Wong, chief strategist at Saxo Markets.
The China Securities Regulatory Commission said in a statement that the decision was based on the companies’ own concerns about their business.
About 300 companies based in China and Hong Kong – with a combined market capitalization of over 2.4 trillion. dollars – are threatened with a forced exit from Wall Street, Bloomberg Intelligence estimated in May. Among them the biggest were China Life, PetroChina, China Petroleum & Chemical, Alibaba and Baidu.
Source: Capital
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