US Securities Regulators Warn "Chinese Companies Face Delisting if They Repeatedly Refuse Inspection Investigations" (Comprehensive)

"Must Disclose Whether Owned by Chinese Government"

Wall Street road sign in front of the New York Manhattan Stock Exchange (NYSE)

The U.S. Securities and Exchange Commission (SEC) announced on the 2nd (local time) that Chinese companies listed on U.S. stock exchanges will be required to disclose whether they are owned or controlled by the Chinese government.

According to CNBC and other outlets, the SEC has established detailed rules to implement the "Foreign Company Accountability Act," which was passed by the U.S. Congress last December.

The detailed rules also include a provision that allows delisting Chinese companies that refuse PCAOB (Public Company Accounting Oversight Board), the U.S. accounting oversight body, inspections for three consecutive years.

Until now, the U.S. has demanded direct investigations of the accounting firms of Chinese companies trading on its stock markets, but Chinese authorities have refused PCAOB inspections of their companies, citing "national sovereignty."

SEC Chairman Gary Gensler also issued a statement on the same day, pointing out that while over 50 countries have cooperated with PCAOB's accounting inspections, "historically, only two places have not done so: China and Hong Kong."

Chairman Gensler said, "If a foreign company wants to issue securities in the U.S., the accounting firm auditing that company's books must be subject to PCAOB inspections."

Chinese authorities strongly opposed the SEC's measures, calling them political pressure and suppression against Chinese companies.

Zhao Lijian, spokesperson for the Chinese Ministry of Foreign Affairs, said at a regular briefing on the 3rd (local time) in response to questions about the SEC's measures, "This is political pressure on Chinese companies and another concrete action to suppress China's development," adding, "We firmly oppose this."

He stated, "The U.S. should provide a fair, just, and non-discriminatory environment rather than placing layers of obstacles for foreign companies investing and operating in the U.S.," and warned of retaliatory measures, saying, "China will take necessary actions to protect its legitimate rights and interests going forward."

This content was produced with the assistance of AI translation services.