CGTN | 19-Jun-2020
China’s financial hub Shanghai has visioned to become an international financial center for a long time. With an increasing number of U.S.-listed Chinese companies seeking for re-listings back home, the question about whether Shanghai can be the new home they desire is getting new attention.
“The development of the financial market in Shanghai is very good, but in general, it is not really international yet,” said Zhou Xiaochuan, China’s former central bank governor, in a video speech in the Lujiazui Forum of top financial regulators in Shanghai on Thursday, citing several challenges and advantages for Shanghai to be an influential world-class financial center.
One of the challenges was exposed by the multi-million-dollar accounting fraud of China’s coffee brand Luckin Coffee. The scandal has, to some extent, triggered a crisis of trust in Chinese firms listed in the United States.
The recent scandals have left U.S.-listed Chinese firms in a more challenging situation to operate in the U.S. market. The U.S. Securities and Exchange Commission even publicly warned of the risk involved in the U.S.-listed companies, which is rare.
Zhou said the Luckin scandal and the occurrence of short-selling of some Chinese companies by Muddy Waters Research reflect a gap between Chinese accounting practices and international standards.
However, “some have linked the issues of transparency and audit quality with national economic security concerns and think that no solution can be found, which I can’t agree with,” he said.
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