| Summary/Abstract |
This paper analyzes the relationships between the Chinese and US stock markets, concluding that there is an indirect psychological link between the two. It looks at issues related to Chinese companies' future prospects on US stock exchanges and the risks of getting delisted as Chinese-American relations become seriously aggravated and the US Securities and Exchange Commission (SEC) acts vigorously to toughen requirements for auditing, financial accounting, and information disclosure by foreign companies registered on US exchanges. The author describes the process of forming a new regulatory framework for delisting Chinese companies whose basic element was the passing of the Holding Financial Companies Accountable Act (HFCAA). The paper analyzes the IPO scheme of variable interest entities (VIE) that Chinese companies use abroad, and also identifies the risks involved. The author also analyzes the competitive potential of national stock exchanges in terms of attracting Chinese IPOs, and draws conclusions about much stricter requirements and lengthier procedures on Chinese exchanges in comparison with American ones.
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