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Beijing seeks talks on joint inspection of U.S.-listed Chinese firms

Published 11/20/2020, 08:20 AM
Updated 11/20/2020, 09:15 AM
© Reuters. Defense Secretary James Mattis welcomes Chinese Minister of National Defense Gen. Wei Fenghe to the Pentagon

(Reuters) - China's securities regulator said on Friday it looked forward to holding discussions with its U.S. counterparts as soon as possible on "specific plans" to conduct joint inspections of Chinese firms listed in the United States.

Washington has long complained of lack of access to audit working papers for U.S.-listed Chinese companies and in August threatened measures to delist Chinese firms that fail to meet its auditing requirements, before Beijing proposed a trial joint inspection of any of its state-run firms.

"It is believed the two sides will adopt an open and professional attitude to reach a consensus" on a plan for joint inspection by auditors on both sides and "create a good regulatory environment for cross-border listed companies," the China Securities Regulatory Commission said in a statement.

The latest CSRC proposal aimed at resolving the dispute was sent in August to the U.S. Public Company Accounting Oversight Board (PCAOB), which said it would actively study the document, after describing China's previous proposals as "materially deficient."

President Donald Trump's administration last week issued executive order prohibiting U.S. investments in Chinese companies Washington says are owned or controlled by the Chinese military.

© Reuters. Defense Secretary James Mattis welcomes Chinese Minister of National Defense Gen. Wei Fenghe to the Pentagon

That prompted some of the firms set to be affected by the order - including those with U.S.-traded American depositary shares such as China Telecom (NYSE:CHA) Corp Ltd (HK:0728) - to warn of an impact on their share prices.

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