The US and China are grappling with protracted standoffs on issues such as market access, data security and international stock listings. China’s most recent crackdown on a number of its own companies burned international investors, further puzzling the US business community, which is seeking more clarity on the recent moves from Beijing.
John Thornton, the chairman of Barrick Gold Corp. and a Goldman Sachs Group Inc. veteran, is one of the chairs of the group dubbed the China-US Financial Roundtable. It had been put together with the support of senior Chinese officials and co-chaired by former central bank governor Zhou Xiaochuan.
Thornton is in Beijing meeting with Chinese authorities including Vice Premier Liu He and the China Securities Regulatory Commission Vice Chairman Fang Xinghai, two people said, asking not to be identified because they are not authorized to discuss the matter. The CSRC didn’t respond to a request for comment, while the Foreign Ministry deferred questions to other relevant departments.
‘Get Out’
Past meetings have drawn representatives with ties to heavyweights of US finance, including Blackstone Inc., Goldman Sachs, JPMorgan Chase & Co. and Morgan Stanley. The delegation last met in October. At the time they had resolved to try and mitigate political risk that threatened their access to the world’s largest market outside the US.
When initially conceived in 2018, the talks drew a strong rebuke from the then White House top trade adviser Peter Navarro, who told Wall Street to “get out of the negotiations,” accusing them of pressuring President Donald Trump to end his trade war with China. While the pandemic prevented face-to-face engagement, the roundtable met virtually in October and is expected to resume in a similar format this year.
Tensions with the US remain high. Securities and Exchange Commission Chair Gary Gensler on Tuesday warned hundreds of Chinese companies that have raised money in US markets that they risk having their shares delisted if they don’t submit to increased scrutiny. Gensler pledged to strictly enforce a three-year deadline that requires the firms to permit inspections of their financial audits, implementing a mandate from Congress.
Despite this, China has been opening its financial markets more fully to Wall Street giants such as Goldman Sachs and BlackRock Inc., counting on them to provide fresh investments and foster a more competitive local investment banking and mutual fund industry.
China also sent its strongest signal yet this week that it’s serious about resolving an impasse with the US over access to its companies’ books.
The State Council, China’s top government body, on Monday issued guidelines saying it would boost cross-border accounting cooperation, while also safeguarding its information security. That came on the heels of a statement from the nation’s security regulator, which said it would work on enhancing conditions for cooperation with the U.S. on company audits during the second half of the year.
