If we were to pick the most noteworthy undercurrent in the recent capital markets, the "confrontation" between Chinese and U.S. listing regulators is definitely on the list. On the surface, some Chinese companies planning to go public in the U.S. have received verbal notices to "suspend progress", and the filing cycle has been significantly extended. However, when delving into the underlying logic, this matter is far more complex than it appears. The core of the issue is no longer "whether audit working papers can be inspected". This topic already had a preliminary answer in the PCAOB cooperation agreement renewed two years ago. The current focus of the dispute between the two sides is "how to conduct the inspection and how to handle the results after the inspection". U.S. actions have highly alerted Chinese regulators. Recently, the U.S. SEC has issued fines totaling over $200 million against multiple Chinese companies listed in the U.S. on the grounds of "insufficient information disclosure", an amount exceeding the total of the past two years. More critically, during the law enforcement process, there were requests for data involving national security-related businesses, which has touched the hard red line of China's Data Security Law. Meanwhile, the U.S. Congress is advancing an amendment that requires foreign listed companies to allow U.S. regulators "unrestricted access" to audit working papers. This requirement directly conflicts with China's current legal framework. The China Securities Regulatory Commission (CSRC) has responded with "responding with calm to proactive moves" — slowing down the filing pace, which essentially sends a signal to the other side: cooperation is negotiable, but it cannot be a one-sided concession. The PCAOB is about to release its annual inspection report on Chinese accounting firms. How the SEC interprets this report will directly affect the direction of subsequent policies. If the assessment result is deemed "sufficient and effective", the market is expected to see a gradual resumption of the filing pace; conversely, the situation may be hard to improve before the end of the year. For companies that are preparing to go public in the U.S., the most pragmatic strategy at this stage is to make preparations for both scenarios: on one hand, continuously improve the compliance system, and on the other hand, evaluate the feasibility of the Hong Kong market as an alternative listing path. Under the current environment, betting all chips on a single track is overly risky. This game has no quick end. But a reasonable judgment is that the two deeply interconnected capital markets will eventually find a way to stabilize — it's just that this process requires more patience than imagined. © 2021 Meishun (Hong Kong) Management Consulting Co., Ltd. and Meishun (Hangzhou) Management Consulting Co., Ltd. All rights reserved. Meishun Meiyin (Hangzhou) Consulting Management Company is a domestic subsidiary of Hong Kong Meishun Management Consulting Co., Ltd. under the same ultimate beneficial owner. Both companies share the same ultimate beneficial owner, are under the same unified Chinese management, and comply with the laws of Hong Kong and mainland China.