About 200 companies in China and Hong Kong, including Alibaba and JD.com, no longer face the threat of a US delisting after US inspectors reviewed their audits
Bloomberg : Tweets: @sofiahcbbg Tweets: Sofia Horta e Costa / @sofiahcbbg : A breakthrough. US accounting inspectors say Chinese companies have given them complete access to audit documents. The news removes the acute threat of delisting for about 200 Chinese stocks trading in the US. 10/10 https://www.bloomberg.com/...
Context & Ripple Effects
The delisting clock started in 2021, when the SEC began implementing the law that would force foreign companies off US exchanges for failing audit inspections. Through 2022 the SEC escalated: it named JD.com, Pinduoduo, Bilibili, and NetEase in May, then put Alibaba on the delisting list in July, knocking the stock down more than 9%.
The turn came in August, when Washington and Beijing announced a deal to share audits with inspections run from Hong Kong. Today's confirmation that US inspectors received complete access converts that agreement from promise to result — the acute threat is lifted for roughly 200 companies.
First-order effects
- About 200 China- and Hong Kong-based issuers, including Alibaba and JD.com, are removed from the delisting track created by the SEC's 2021 enforcement of the audit law.
- For Alibaba and JD.com specifically, the compliance overhang that the SEC's list designations created — and that hit Alibaba's stock in July — is now resolved on the US-listing question.
Second-order effects
- The main pressure pushing these companies toward primary listings in Hong Kong eases, changing the calculus for how much listing infrastructure they maintain across the two exchanges.
- The SEC keeps its leverage: access was granted for this review cycle, and the delisting law stays on the books, so future inspections that find restricted documents can re-trigger the same threat.
Third-order effects
- The episode establishes that cross-border audit disputes between the US and China get negotiated rather than ending in mass delisting — a template other jurisdictions with restricted-audit regimes will be measured against.
- If the access holds across future inspection cycles, US exchanges retain Chinese mega-caps as listings, and the audit-access regime becomes a recurring compliance test rather than a one-time rupture.
The trend: US-China capital-market friction is settling into an inspect-and-enforce routine, with audit access — not delisting — as the operating baseline for Chinese ADRs.