Compromise over delisting may signal China-US thaw

Significance

Chinese regulations prevent Chinese firms listed on US exchanges from complying with US auditing regulations, leading to US threats to delist them. Among the 200-plus Chinese companies exposed to this threat are many large Chinese technology businesses.

Impacts

• Washington may seek to leverage this issue to pressure China to refrain from supporting Russia in its war with Ukraine.
• China wants its tech firms to list at home, to capture more of the returns as they grow, and reduce vulnerability to US pressure.
• New York will remain important for Chinese firms, since Chinese stock markets cannot match it for investor interest and liquidity.