by Mehmet Emin Hazret
In recent years, more than 80 Chinese companies have quietly delisted from U.S. stock exchanges.
But why?
At the center of this exodus is the U.S. Holding Foreign Companies Accountable Act (HFCAA).
This law requires foreign companies listed in the U.S. to fully comply with American auditing standards.
However, Chinese firms are reluctant to accept this scrutiny.
Why?
Because Chinese Communist Party laws prohibit sharing audit documents with U.S. regulators.
As Professor Yakov Amihud of New York University explains:
“Chinese companies are fleeing the U.S. because they don’t want the burden of transparency, auditing, and information sharing.”
What else lies behind this trend?
Over the years, the SEC and the PCAOB have uncovered widespread accounting fraud in Chinese companies.
Many firms gained access to U.S. markets through reverse mergers, false disclosures, and fraudulent activities—causing major losses for American investors.
In 2022, five major Chinese state-owned enterprises voluntarily withdrew from the New York Stock Exchange:
China Life, Sinopec, PetroChina, and others…
Their goal was clear: escape U.S. regulatory oversight.
Because these audits scrutinize companies’ internal structures, financial reports, and accountability practices.
On the other hand, listing in the U.S. still has strong appeal:
High liquidity, greater investor confidence, and stronger global visibility.
But Chinese firms are now charting a new course: Hong Kong.
Yet experts warn this is no real solution.
Hong Kong’s liquidity can’t match the depth of the U.S. capital market.
So what’s the bottom line?
As U.S. regulators tighten their grip, Chinese companies look for an exit.
But anyone taking that door leaves investor trust behind.
This is more than a financial decision—
It’s a test of transparency.
So the question is:
How much are investors truly able to see?
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