The SEC is expected to crackdown on 200 companies with headquarters in mainland China or Hong Kong because the American watchdog and reviewers can’t review these companies’ audited numbers. From China’s side, they say they can’t show their American counterparts what they’re asking for because of the national security law. From the US side, the argument is that these companies access a market economy and US capital but operate in a non-transparent system where they may also receive government support.
Recent notable additions to the SEC’s list are Weibo and Baidu, which are like China’s Twitter and Google, respectively. We should know more in the coming weeks.
“The SEC will gradually move to identify the more systemically significant China based companies listed in the U.S.," said Shaswat K. Das, a lawyer at King & Spalding LLP who previously worked at the Public Company Accounting Oversight Board as its primary negotiator with the Chinese regulators on cross-border audit oversight from 2011 to 2015.
“Both Chinese and U.S. regulators are fully aware of each other’s concerns, and are moving toward each other, and working hard to find solutions to the issue in order to achieve effective and sustainable cooperation as soon as possible," an anonymous source close to Chinese regulators was reported saying by state-run China Securities Journal.