Chinese companies be delisted if they fail to comply with U.S. audit requirements

Trump Administration announced that Chinese companies listed on the U.S. stock exchange could be delisted if they fail to comply with U.S. audit requirements according to plans recommended by the Trump administration. There were several problems that Chinese companies did not disclose financial statements sincerely. Companies that have already been listed have been given a deadline for compliance by 2022. Also companies that have plan to list in the U.S. stock market in the future must comply with audit requirements prior to listing.

The regulation against Chinese companies can imply two meanings.
1. To eliminate financial fraud regarding to the precedent issue such as Luckin Coffee listed in Nasdaq last year.
2. To use China as a tool for the next election. Threatening Chinese companies can switch the issue from inferior COVID-19 countermeasures.

WHO and China are the easiest target to change COVID-19 issue right before the election which will held November this year. So investors should think carefully.

[News from WSJ]
https://www.wsj.com/articles/trump-administration-seeks-crackdown-on-chinese-companies-with-shares-traded-in-u-s-11596748284?fbclid=IwAR2z7QR9dqwLMF1LbW3Rz0t0_cmVQWooxp6APzwGI9IBaGgEzfXwBLwUrq4