Image by Design n Print from Pixabay 

In the past two days, the stock price of Chinese companies rebounded, led by Alibaba (NY: BABA), NetEase (NQ: NTES) and JD (NQ: JD), the top three companies with market capitalization, with 36%, 26% and 39% rise respectively on March 16^th.

The Financial Stability and Development Committee under the State Council of China held a special meeting, and Liu He, director of the financial commission of China, expressed the necessity to introduce policies beneficial to the capital market and paid special attention to the "restrictive fiscal policy" and any policies that had a significant impact on the capital market, released after coordination with the financial sector. This implied that the government intended to protect the capital market and introduce policies after making relevant capital adjustments, to avoid excessive emotional panic and capital flight.

Another important signal from the meeting was that the relevant financial departments in China conducted a productive communication with the US regulators to promote a specific cooperation plan. It would be of great help to Chinese companies in the "pre-delisting list" of "the first batch of Chinese companies" issued by the SEC rather than being in a dilemma to provide manuscripts,  without disclosing security information, in place of draft of audits.

In the past, the SEC has sanctioned Chinese companies from time to time. In 2013, the SEC first initiated administrative litigation against five accounting firms in China because of their refusal to submit working documents related to the Chinese companies they audited. In this sanction, the major dispute was that lots of companies who rushed to list in US capital market suffered the suspicion of financial fraud. Moreover, it seemed to be a confrontation in national security issues that there were excellent companies listed in the US, which probably maintained information too sensitive to be handed in. The cliffhanger is whether history will repeat; only time will tell.