- July 24, 2022
- Posted by: Bastion team
- Category: World News
China is preparing a system to sort US-listed Chinese companies into groups based on the sensitivity of the data they hold, in a potential concession by Beijing to try to stop American regulators from delisting hundreds of groups.
The system is designed to bring some Chinese companies into compliance with US rules that require public companies to allow regulators to inspect their audit files, according to four people with knowledge of the situation.
Chinese companies listed in the US would be divided into three broad categories, two people said. The groups would be companies with non-sensitive data, those with sensitive data and others with “secretive” data which would have to delist.
One of the people said that Beijing had discussed whether companies in the “sensitive data” category could restructure their operations to become compliant, including by outsourcing the information to a third party.
The category system would be the second significant concession by Beijing to remove hurdles allowing the US full access to audits. In April, it modified a decade-long rule that restricted the data-sharing practices of overseas companies.
The planning, which is under discussion and subject to change, follows months of stalled negotiations between Beijing and Washington over the US demand that Chinese companies and their auditors should make detailed audit documents available or be delisted in 2024.
A mass delisting would represent a significant step towards economic…