The Implementation Status and Future Trends of Holding Foreign Companies Accountable Act and Challenge to China
Year: 2025
Type: article
Abstract: The Holding Foreign Companies Accountable Act (HFCAA) of the United States, effective since 2020, has significantly strengthened audit oversight requirements for Chinese-listed companies, marking a pivotal step in reshaping the U.S. regulatory framework for capital markets. As a political legacy of President Trump’s first term, the enforcement of HFCAA may be escalated upon his return to office, triggering systemic shocks to the valuation of Chinese concept stocks, U.S.-China financial ties, and the global market structure. This study focuses on three critical dimensions of policy adjustments during the Trump administration: (1) trajectories of regulatory enhancement; (2) risks of financial decoupling between China and the U.S.; and (3) restructuring effects on international capital flows. It proposes that China should construct a strategic response system through: (a) establishing a legal counterbalancing mechanism framework; (b) refining its domestic capital market ecosystem; and (c) strengthening cross-border regulatory coordination and remedial mechanisms. The research aims to provide theoretical foundations and policy references for anticipating HFCAA regulatory evolution and fostering enhanced Sino-U.S. regulatory collaboration.
Source: Law Economics and Society
Authors: Yuchen Zou, Huirong Zhang, Gao Jianxun
Institution: Fuzhou University
Language: English
Field: Social Sciences
Domain: Social Sciences
Open Access status: hybrid
OpenAlex ID: W4410724499