Chinese stocks may start exiting the U.S. in two years, warns Asian Corporate Governance Association
The delisting of U.S.-listed Chinese stocks may come in the next two to three years, according to Jamie Allen of the Asian Corporate Governance Association.
«There doesn't seem to be a huge incentive … for China to compromise, nor does the U.S. seem to want to compromise,» the secretary general at the non-profit organization told CNBC's "Squawk Box Asia" on Tuesday.
With both sides appearing to dig in their heels, Allen said delisting for U.S.-listed Chinese firms is set to start in a few years.
«There are some discussions ongoing at the moment between the two sides, but these discussions have been going around in circles for quite a long time,» he said. «Unless there is some change in the geopolitical relationship between these two countries, it does seem to us that in two or three years you will start to see delisting.»
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Dual-listed Chinese stocks were recently in the spotlight after delisting fears reemerged following a U.S. Securities and Exchange Commission announcement that U.S.-listed securities for five Chinese companies are at risk of delisting, as they failed to comply with the Holding Foreign Companies Accountable Act.
The act allows the SEC to delist and even ban firms from trading on U.S. exchanges if regulators cannot review company audits for three consecutive years. Concerns about information security from Beijing, however, have generally prevented Chinese companies from allowing such audits.
Following an initial plunge, the shares later saw
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