Lhe China Securities Regulatory Commission (CSRC) dropped a regulation that prohibited Chinese companies from disclosing their accounting data to foreign auditors, in a statement issued on April 2.
The announcement of the Chinese stock market regulator startled the small trans-Pacific stock market, which had predicted the massive delisting of the said companies whose accounts were closed, until then, to American auditors. If the CSRC justifies its “openness” by the concern to better protect investors, no one is fooled that, threatened by the Washington legislator, Beijing has indeed laid down its arms to avoid financial “decoupling” with its ideological rival. .
The origin of the story is akin to a simple conflict of laws: according to the federal Sarbanes-Oxley law passed in 2002 following the financial crashes of Enron, a company listed in the United States, whatever its nationality , must have its accounts certified by the auditors of the SEC (Securities and Exchange Commission), the “policeman” of Wall Street; however, Chinese companies listed in New York cannot comply with this American law without violating Beijing’s national security law, which stamps such data as “state secrets”.
SEC Indulgence
There then followed a Sino-American showdown which, for a good decade, had held the capitalist milieu in suspense with numerous twists and turns linked to the degree of priority granted by Washington in its duel with Beijing.
We are a long way from the time when a battered Wall Street, recovering from the 2008 crisis, welcomed with open arms the Chinese companies that crossed the Pacific to tap into the liquidity of the New York Stock Exchange – 55% of the capitalization world – to acquire the means to prosper, and this, with the blessing of the State-party which sees in these Chinese quotations – whose number rises to 281 to date – the reflection of its own power on the scene world.
And the victory would not have happened without the indulgence of the SEC, which exempts them from the legal obligations of their host country by taking into consideration the law of their country of origin, nor without the very expensive assistance of the audit firms. and big banks that do not fear the troubled waters of a capitalism methodically planned by a totalitarian regime and swim there happily.
Admittedly, the SEC tried to eradicate this “Chinese exception” which ends up discrediting the federal institution itself. But, for years, the talks with his Chinese counterpart looked like an endless dialogue of the deaf: when one demanded the transparency of the accounts and the protection of shareholders, the other opposed the virtue of dialogue and national sovereignty.
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