Chinese IT giants are now suffering from a severe crackdown initiated by China's government. The US makes the situation for already choking companies even worse. Notably, they implemented their own measures against Chinese big tech companies.
Beijing put the biggest local private companies under intense pressure. Additionally, foreign counterparts and regulators are trying to turn their business into a complete mess. Recently, Securities and Exchange Commission Chair Gary Gensler warned about a possible delisting of Chinese stocks from the US exchanges. The official said that China-based companies must comply with new rules to audit their financial documents. In case a company fails to meet new standards before 2024 it will be kicked from American exchanges by delisting the company’s stocks. The new restrictions aim to punish Chinese companies that have used US exchanges for raising money for decades. Gensler said he would strictly enforce new rules and would not allow any delays in inspections. Businesses will have to provide full and fair disclosure of the audits for investors. In order to achieve this, the SEC will pay close attention to information about possible regulatory or political risks for Chinese companies imposed by the government of China. The SEC Chair flagged that audits would most likely be conducted in 2022.
