Trump advisers ask to withdraw Chinese companies that violate audit rules from the U.S. stock market

ARCHIVE PHOTO: The flags of China and the United States fly in Shanghai, China, on July 30, 2019. REUTERS / Aly Song

By Alexandra Alper

WASHINGTON, Aug. 7 (Reuters) – China on Saturday called for frank dialogue and closer cooperation in reaction to news that Trump administration officials urged the U.S. president to withdraw listed Chinese companies from the stock market. United States and that do not meet audit requirements until January 2022.

United States Securities and Exchange Commission officials revealed the lawsuit on Thursday after President Donald Trump commissioned a group of senior advisers – including Treasury Secretary Steve Mnuchin and SEC President Jay Clayton – writing a report with recommendations to protect American investors from Chinese companies whose audit documents have been kept out of the reach of American regulators.

The initiative also comes at a time when Congress is pushing for strong action against Chinese companies that resort to US capital markets, but do not meet American standards applicable to competitors in the country. .

“We are simply leveling the playing field, making Chinese companies listed in the United States follow the same standards as others,” a Treasury official told a news conference.

On Saturday, China’s top stock market regulator reacted cautiously to the United States’ announcement.

“We believe that resolving issues of mutual interest through dialogue is the only way to achieve a win-win situation,” said the China Securities Regulatory Commission (CSRC) in a statement in response to the US recommendations. .

The Chinese body also said it has proposed joint accounting inspections with US regulators, showing “complete sincerity regarding cooperation”.

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The CSRC argued in the statement that China has never banned or prevented accounting firms from providing foreign regulators with audit documents, although this sharing of information must be done through regulatory cooperation channels under Chinese law. .

The US Senate unanimously passed legislation in May that could prevent some Chinese companies from being listed on US stock exchanges, unless they follow US audit and regulatory standards.

(Information from Alexandra Alper; additional information from Samuel Shen in Shanghai and Cate Cadell in Beijing; edited by Norihiko Shirouzu and Angus MacSwan; translated by Tomás Cobos)

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