U.S. puts Chinese microblogging site Weibo on its delisting watchlist

U.S. authorities have reportedly fastened the process of enforcing a law that might delist Chinese firms whose accounting records aren’t available for inspection. Weibo, China’s Twitter-like app, was recently added to a delisting watchlist by the SEC and it could mean other Chinese internet companies like Baidu and Alibaba are likely to face the same pressure in the coming months.

Notably, Washington had long been demanding more access to the books of U.S.-listed companies, but Beijing had barred foreign scrutiny of accounting papers from local firms, citing risks to national security.

In 2020, the Trump government passed a bill that imposed stricter accounting standards on foreign companies. The new law demands transparency into the records of U.S.-listed foreign firms, especially Chinese ones. This change has not been received well by some nations that might have to publicize data that could risk their national security.

Notably, China is among the select few countries that don’t adhere to guidelines provided by the Public Company Accounting Oversight Board, which primarily focuses on auditing foreign firms’ trading stocks.

However, the reluctance is fading slowly, as China seems to be coming around by telling its U.S.-listed tech darlings, including JD, Alibaba, and Baidu, to prep for more detailed audits. These auditing papers will not include sensitive data, cited sources with knowledge of the matter.

Several Chinese tech firms listed on U.S. stock exchanges have pursued other listings in Hong Kong given the growing tensions between the two countries. However, Beijing’s latest gesture indicates that China is now willing to make concessions that will keep its companies investable in U.S. markets.

At the beginning of this month, the SEC had named five firms, including biotech company BeiGene Ltd., and Yum China Holdings, which could face delisting in the U.S., and Weibo was the latest addition to the list on Wednesday.

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By Tete Heigrujam

Armed with a post-graduate degree in English Literature, Tete Heigrujam takes a keen interest in exploring the ever-evolving content landscape. She holds several years’ worth of experience in the field and pens down articles on numerous topics like technology, business, and crypto for people.partilepep, blending her knowledge of the language and technical expertise in her pieces. A hardcore BTS fan, Tete spends her free time listening to music and cooking to her heart’s content.