The past and future of the China–US audit oversight dispute: a geopolitical perspective

The China–US audit oversight dispute concerning US-listed Chinese firms has long been an important and difficult issue in international capital markets. Although the Chinese and American authorities signed an agreement in 2022 and started to implement it to solve their audit disputes, there are concerns over whether and how it will continue to function smoothly, particularly due to the changing China–US relations. Drawing on a number of theories relating to institutional bargaining, complex interdependence, and regulatory hybridity, this article tries to first explain the initial success of the 2022 agreement and then discusses worrying signs of tensions between the two sides of the agreement. The functioning of the 2022 agreement will be increasingly affected by geopolitical factors such as weakened regulatory independence and reduced financial interdependence. However, this does not necessarily mean that the agreement will be torn up in the foreseeable future. Rather, this article argues that despite geopolitical tension between China and the USA, there remain opportunities for them to maintain regulatory cooperation on audits of US-listed Chinese companies.