China may let US audit SOEs to resolve accounting dispute

US has long complained of lack of access to audit papers for US-listed Chinese companies and threatened to delist Chinese firms that fail to meet its auditing requirements

by Samuel Shen and Andrew Galbraith
China may let US audit SOEs to resolve accounting dispute
US and China flags. Photo: Reuters

Shanghai - China is proposing to let US regulators audit its state-owned enterprises (SOEs) in a concession aimed at solving their long-running accounting dispute, but would insist on redacting some information on national security grounds, Bloomberg News reported on Thursday.

The United States has long complained of lack of access to audit working papers for US-listed Chinese companies. Washington earlier this month threatened measures to delist Chinese firms that fail to meet its auditing requirements.

Fang Xinghai, vice chairman of the China Securities Regulatory Commission (CSRC), told Bloomberg that CSRC this month sent the US Public Company Accounting Oversight Board (PCAOB) a fresh proposal that would allow the US to pick any of its SOEs for a trial joint inspection.

A previous trial inspection done jointly by Chinese and US regulators failed to yield an agreement, the article said.

Fang also called for direct talks with US officials, but an offer for a video or phone meeting has yet to get a response, it said.

Fang didn't immediately reply a request for comment.

Fang's remarks echoed an August 8 statement by CSRC in response to delisting calls from the Trump Administration.

In that statement, CSRC said it has been proposing joint accounting inspections with US regulators with a show of "total sincerity towards cooperation". CSRC also said solving the issue through dialogue is the only way toward "win-win" situation.

Reuters

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