Speaker 1: Well, talk seem to be gathering pace here between Beijing
Speaker 1: and Washington to avoid the de listing of Chinese companies
Speaker 1: from New York. And what it seems to be is
Speaker 1: that they're looking to let US inspectors travel here to
Speaker 1: Hong Kong and review these audit papers of Chinese businesses.
Speaker 1: Joining us now is Lu lu Chen, Bloomberg's Asia investing
Speaker 1: and real estate team leader. So, Lulu, we're reporting this, uh,
Speaker 1: and do we see this as a breakthrough happening or
Speaker 1: is this just incremental progress on this story. So what
Speaker 1: we've been told is that Chinese regulators have instructed major
Speaker 1: accounting firms to prepare to bring the audit work papers
Speaker 1: UM to Hong Kong where they can be reviewed by
Speaker 1: the auditing board of the U s UM. For the US,
Speaker 1: my understanding is that nothing has changed. The SEC has
Speaker 1: always had a tough stance saying it's all access or
Speaker 1: nothing UM. So the progress is really from a development
Speaker 1: from kind of part where they are giving out these
Speaker 1: instructions and it seems like there is some action on move. Yeah,
Speaker 1: we've seen we've seen progress in the past, kind of dissipate.
Speaker 1: You'd think that investors would be one bit and twice shy,
Speaker 1: but they are they are buying into this story, and
Speaker 1: I think it's important to report that we we don't
Speaker 1: have any comment from the SEC. We also don't have
Speaker 1: any comment from the China Securities Regulatory Commission. Uh So
Speaker 1: it's it's very much up in the air. But progress
Speaker 1: is progress, and it seems like this this is a
Speaker 1: little bit of a breakthrough having US inspectors beyond somewhat
Speaker 1: neutral ground in Hong Kong Um. Yeah, it does seem
Speaker 1: like there is some progress. Something is happening, and I
Speaker 1: can understand why there is a there is pressure to
Speaker 1: get a deal out because the clock is ticking. Um.
Speaker 1: The post deadline for four is going to happen if
Speaker 1: they don't reach these agreements the end of the year. UM.
Speaker 1: Auditing these papers will take time as well. And there's
Speaker 1: a lot of money at risk here. As of March,
Speaker 1: there were one point five trillion dollars worth of companies
Speaker 1: Chinese companies listed in the US, so a lot at
Speaker 1: stake here, Lulu. We know that Chinese companies can raise
Speaker 1: a lot of money in Hong Kong Um and they
Speaker 1: can raise money in China as well. Why is the
Speaker 1: US so important to these companies. The US has always
Speaker 1: been a more UM preferred route for Chinese companies to list,
Speaker 1: especially for the tech companies and companies that have a
Speaker 1: less established model, especially a less established profit model. UM.
Speaker 1: Here in Hong Kong, you can see that the most
Speaker 1: of the companies that do well are traditional businesses, so
Speaker 1: that UM that sector UM, the new economy sector that
Speaker 1: has really created some of the world's largest companies. Traditionally
Speaker 1: most of them have been listed in the US. There's
Speaker 1: a lot more liquidity UM in New York as well UM,
Speaker 1: and also UM the investor composition is just a lot
Speaker 1: more different institutional investors dominate the US UM New York
Speaker 1: Stock Exchange in NASTAC, whereas here in Hong Kong there
Speaker 1: there is UM less of that. So so I think
Speaker 1: like for companies and investment banks which make a bigger fee,
Speaker 1: the US has been the traditional preferred route. Lulu, thanks
Speaker 1: very much for joining us. Here Live Lu lu Chen,
Speaker 1: Bloomberg's Asia Investing and Real Estate team leader