Chinese Delegation to Visit U.S. Fin. Regulators

Chinese financial regulators will meet with their American counterparts in October as part of an ongoing series of visits aimed at increasing mutual understanding of regulatory practices in both countries, with the U.S. hoping for an eventual cooperative agreement similar to what the Public Company Accounting Oversight Board (PCAOB) has already crafted with Swiss and British regulators, according to the Wall Street Journal. The visit will come three months after the PCAOB sent its own delegation to Beijing to meet with representatives of the China Securities Regulatory Commission (CSRC) and the Chinese Ministry of Finance (MOF) this past July, where they shared PCAOB inspection practices and its methodologies on cross-border audit oversight.

In the wake of recent controversies regarding Chinese reverse mergers, PCAOB Chair James Doty took a tough stance in saying that said an arbitrary position of refusing cross-border collaboration "will no longer fly", claiming market pressures make capitulation inevitable, according to Accountancy Age. Though the PCAOB said that recent talks with Chinese regulators have been very productive, according to the Wall Street Journal, those familiar with the meeting’s particulars said that negotiations on crafting a cooperative agreement were largely unsuccessful, with the sides agreeing only to have further meetings, according to the Business Insider. Senior Chinese officials expressed concern that cross-border supervision may infringe on Chinese sovereignty and that, furthermore, it wants any agreement to be reciprocal: Chinese regulators would also need access to U.S. companies, but Chinese has neither the need nor the capacity to do so right now. Finally, Chinese regulators argued that their auditing industry is still growing and wants to protect it from outside influences.