U.S.-China corporate audit rift persists as summits begin

Fri Jun 7, 2013 5:21pm EDT
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* Business groups push Treasury to take on negotiations

* Agreement from May 24 seen as positive, partial step

By Nanette Byrnes and Dena Aubin

June 7 (Reuters) - The Obama administration is under pressure from large corporations and a senior U.S. senator to revisit oversight of Chinese corporate audits at upcoming summit meetings, as disputes persist despite a partial deal on the issue reached in May.

U.S. President Barack Obama is set to meet Friday and Saturday with Chinese President Xi Jinping. Their discussions were likely to focus on other topics, but New York Senator Charles Schumer has urged the two leaders to take up the auditing issue.

"It is in the interests of both U.S. financial markets and Chinese companies seeking to raise money here that investors know they can trust the financial statements of those companies," Schumer said in June 6 letter to U.S. Treasury Secretary Jack Lew ahead of the Obama-Xi summit.

A likelier forum for the issue will come on July 8 at a meeting of senior economic officials, including Lew. The final agenda for these sessions was still being shaped. Business groups want it to include the Chinese auditing issue.

The U.S.-China relationship is vital to both countries, but fraught with tensions, not the least of which involve China's willingness and ability to comply with accounting and financial standards widely accepted across the developed world.

Looming in the background of this weekend's and next month's talks will be a handful of Chinese initial public offerings aiming to hit U.S. stock markets soon.   Continued...