Big Tech shed tens of thousands of jobs over the past several months as giants Google, Amazon, Meta and Microsoft have reduced their workforces. But while white-collar jobs are cut, some blue-collar jobs are difficult to fill despite the rising wages in that sector of the economy. Keith Kocinski has more.
Camera: Keith Kocinski, Rendy Wicaksana
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Дерипаска стверджує, що Росії «будуть потрібні іноземні інвестори»
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За словами міністра фінансів, представники МВФ та України будуть узгоджувати і умови, і наповнення, і обсяги майбутньої програми
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За даними Міжнародної енергетичної агенції, в січні 2023 року доходи Росії від експорту нафти та газу становили 18 з половиною мільярдів доларів.
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In a possible sign that the so-called “decoupling” of the U.S. and Chinese economies is continuing, a recent media report said that the Chinese government has urged large state-owned enterprises (SOEs) to cease using the world’s biggest global accounting firms to audit their onshore businesses.

The report, published last week by Bloomberg, cites people familiar with communications between the Chinese Ministry of Finance and large SOEs, in which the ministry encouraged the companies to allow their existing contracts with Western firms to lapse when they expire, and to replace them with accounting firms from mainland China or Hong Kong.

According to the report, the Chinese government’s focus is on the so-called “Big Four” accounting firms, PricewaterhouseCoopers (PwC), Ernst & Young, KPMG and Deloitte. All four firms have headquarters in London but are instrumental in helping many global companies comply with the audit requirements U.S. authorities require of public firms with shares listed on U.S. stock exchanges.

There has long been tension between the Chinese government, which highly values the security of information held by its large companies, and Western financial services regulators, who prize the kind of transparency that allows investors to make informed decisions about companies seeking to raise money in the capital markets.

Chinese authorities have, for years, been trying to strike a balance between the protection of Chinese firms’ information and the access to international investment capital that comes with exposure on stock markets like those in the U.S.

China disputes report

The Chinese government, through the state-controlled publication the Global Times, has disputed the Bloomberg report. A recent news story in the Global Times said that Big Four firms “have won bids to provide accounting services to China’s state-owned enterprises in recent days.”

The Global Times cited a decision in February by state-run insurance firm China Taiping to hire PwC to provide its audits from 2023-2027, and another recent decision by Liaoshen Bank, closely connected to the state-owned Liaoning Financial Holding Group, to hire KPMG. Neither report could be independently verified.

The Global Times article, published under a “GT Staff reporters” byline, did not quote any government officials by name.

A request for comment emailed by VOA to the Chinese Embassy in Washington was not answered in time for publication.

An uneven pattern

In recent years, Beijing has taken a number of measures to curtail the outside world’s access to information about Chinese companies.

Last year, citing concerns about potential privacy violations, the Chinese Communist Party forced several firms to give up their listings on U.S.-based stock exchanges, and blocked the efforts of others to list in the U.S.

At the same time, the Communist Party has, at times, seemed willing to cooperate with Western regulators. Last year, Beijing struck a deal that provided U.S. regulators with data on Chinese firms, eliminating the possibility that several would have been forced off of U.S. stock exchanges.

Report comes amid tension

The Bloomberg report was published at a low point in relations between the U.S. and China. Early this month, the U.S. shot down a suspected Chinese spy balloon after it traversed most of the continental U.S. The presence of the balloon led Secretary of State Antony Blinken to cancel a trip to China that was seen as the beginning of an effort to restore dialogue.

Since then, U.S. and Chinese officials have had conversations at international gatherings, but those interactions were marked by U.S. warnings that China should avoid providing arms to Russia to support its invasion of Ukraine or risk serious consequences.

The House of Representatives Select Committee on the Chinese Communist Party was scheduled on Tuesday evening to hold a prime-time hearing entitled “The Chinese Communist Party’s Threat to America.” The hearing is expected to be the first in a long series of high-profile public forums in which members of Congress dig into perceived threats from China.

Data security concerns

Also on Tuesday, media reports revealed that the White House Office of Management and Budget had given all federal agencies 30 days to ensure that the Chinese social media app TikTok is removed from all electronic devices owned by the federal government.

As minor as it might seem on its face, the TikTok ban is actually a mirror image of some of the concerns driving China’s suspicion of Western auditing firms. The concern on the part of the White House is that ByteDance, the firm that owns TikTok, is collecting personal information about the app’s users, and making it available to the Chinese government.

U.S. officials frequently point to a Chinese law that obligates companies to assist state intelligence services in their investigations.

Experts dubious

Some experts told VOA they were not convinced of the validity of the Chinese government’s fears about data security, especially because Western accounting firms are legally bound to protect the privacy of client data that is not part of publicly released reports.

“It’s an excuse. No other government or country has this problem,” said James Lewis, director of the Strategic Technologies Program at the Center for Strategic and International Studies in Washington. “Beijing is paranoid about controlling the economic narrative and worries that the audits might give access to information about the problems of the SOEs that they regard as sensitive.”

Lewis added in an interview, “This is another part of China’s decision to separate itself from the global market and force other countries to accept China’s rules.”

Impact on business may be small

Derek Scissors, a senior fellow at the American Enterprise Institute, told VOA that if the Bloomberg report is correct, and the Chinese government’s request went to state-owned enterprises only, the impact on foreign investment in Chinese firms might not be significant.

“Most foreign investment does not involve state-owned enterprises,” Scissors said. “If this is the only step taken, it will not have a big effect. If other firms are urged to drop foreign auditors, that could frighten investors.”

Scissors also said that the request would not necessarily cut off Chinese state firms from overseas listings.

“They can use foreign auditors just for [initial public offerings] if they ever want to list units overseas,” he said.

Rong Shi of VOA’s Mandarin Service contributed to this report.
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