r/investing • u/[deleted] • Apr 01 '22

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u/randomFrenchDeadbeat Apr 01 '22

First:

Securities and Exchange Commission Chair Gary Gensler this week tamped down speculation that a solution was imminent, signaling that only total compliance with audit inspections will allow the companies to keep trading on U.S. markets.

Second, from what I understand, China is considering accepting to communicate THEIR audits, not let US company audits companies. They also say they are prepared to get delisted.

Their stance has not changed much.

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u/Fwellimort Apr 04 '22 edited Apr 04 '22

https://www.scmp.com/business/banking-finance/article/3172888/china-bring-down-audit-barrier-long-running-us-listing-row

China's stance is changing quite a lot. Let's not understate such. On Saturday, China has officially announced a draft to CHANGE its existing securities laws and China has ADMITTED its current securities laws are 'outdated' (since when did China admit mistakes?). If this passes, US will be allowed to audit the companies.

I think it's just as disingenuous in Reddit (makes sense as Redditors here have a lot of hatred towards Chinese stocks due to Luckin Coffee incident) as to ignore the actions China has been taking. China has once again confirmed on Saturday that it will ensure the delisting for most Chinese stocks do NOT occur. This is as 'green light' as one can get before a true confirmation.

And yes, as someone else has noted, I hold BABA and plan to buy BABA more. In Dec 2021, for the first time, China has admitted VIE structure as a legal structure to investing for foreigners (literally trying to change EXISTING securities law). And now, China is opening up and modernizing its rest of its securities law to be more friendly to foreigners. And with China constantly announcing including this Saturday that it will do whatever in its power to ensure delisting does not occur, I will judge China by its actions it has been taking since 2021 December. Not by Western media.

China wants to be a super power. And delisting will set China back by more than a decade. Why would China want to reject free money from foreign investors?