Chinese Internet Companies Face More Scrutiny at Home. What

Chinese Internet Companies Face More Scrutiny at Home. What That Means for the Stocks.


Lionel Bonaventure/AFP via Getty Images
President Donald Trump signed legislation that paves the way to push Chinese companies off U.S. exchanges, if regulators on both sides don’t come to a compromise around longstanding audit and disclosure issues. That move was anticipated and creates longer-term questions, but big Chinese internet stocks could have bigger near-term problems—at home—as regulatory scrutiny intensifies.
Larger investors have been relatively sanguine about the delisting bill, noting at least a three-year window for regulators to work out a compromise and to sort out how to implement it. The legislation addresses longstanding issues related to Beijing’s refusal to allow the Public Company Accounting Oversight Board (PCAOB) oversight of audits of Chinese companies, citing national security and state-secret laws.

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