According to reports, Chinese authorities are developing a complex compliance system to ensure that their companies are not delisted by American regulators. According to the Financial Times, the move will allow US regulators to audit Chinese firms after the US insisted on transparency from Chinese and Hong Kong firms listed in the US.
According to the report, Chinese authorities have decided to divide US-listed companies into three categories based on data sensitivity. There are three types of companies: those that hold secret data, those that hold sensitive data, and those that hold non-sensitive material.
After Chinese authorities launched cybersecurity investigations into the company, shareholders of Chinese ride-hailing giant Didi Global voted in May to delist the company in New York. As American authorities have increased their scrutiny of Chinese firms, many Chinese companies listed in the United States, including Alibaba, have opted to hold initial public offerings in Hong Kong.
According to the Financial Times, Chinese officials have discussed whether companies in the sensitive data category could restructure operations to comply with US regulations, as Beijing seeks to provide US auditors with more information on companies listed in the US.
China has frequently refused to release information about companies, citing national security concerns. US officials have insisted that Chinese firms provide information about their operations to auditors or face delisting, with mass delisting on the horizon in 2024 if they do not.
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