Chinese corporations being delisted from US exchanges would be a setback for the companies as well as for relations with the US, according to a top official at China's securities watchdog, who also offered broad support for Hong Kong as an international financial centre and site for stock listings.
Delistings from the US market will harm businesses, global investors, and the China-US relationship, according to Shen Bing, director-general of the China Securities Regulatory Commission's Department of International Affairs. He stated that the regulator firmly supports Chinese companies choosing Hong Kong as their primary listing venue.
Last year, US lawmakers passed a bill that threatens to delist Chinese companies that fail to comply with audit inspection regulations. The US Securities and Exchange Commission (SEC) began implementing new rules in March that require US inspection of accounting work done for Chinese companies, despite China's long refusal to do so, citing national security concerns.
The CRSC is "working very hard" with their US counterparts to tackle the audit oversight issues, and communication is smooth and open, Shen said.
China has also tightened requirements for overseas listings, including cybersecurity reviews for companies that collect large amounts of data, which has resulted in several deals being shelved.
Shen also dismissed the interpretation of China's "dual circulation" as a sign that the country is "looking inward," while offering support for Hong Kong and saying that the financial centre will play a "strong role" for Chinese businesses and international investors interested in China.