Chinese Cross-border Listed Companies’ Struggles in Australia: Cause Analysis from a Theoretical and Comparative Perception

The entry into force of the China-Australia Free Agreement (ChAFTA) in December 2015 saw an increasing number of Chinese companies choosing Australia as their listing destination.
As trade between China and Australia increases, it can be expected that this trend will continue. However, Chinese cross-border listed companies in Australia have not operated as well as expected. They are struggling to meet the Australian continuous disclosure requirements to be listed on the ASX, and they have even been depicted as having poor corporate governance and transparency. Chinese cross-border listed companies in Australia face the challenge of having to comply with not only the continuous disclosure requirements in Australia but also those in China, which may cause confusion and even conflict within these companies. To put these struggles into perspective, this paper reviews the historical, economic and political underpins of the securities market in these two countries to highlight the divergence of continuous disclosure regime in both Australia and China from a theoretical foundation. Accordingly, this paper regards the evolution and underlying theoretical rationales for continuous disclosure regime in Australia and China as the entry point. It further sheds light on the similarities and differences between the two jurisdictions. This is followed by a critical review of the implications of such theoretical divergences regarding the continuous disclosure compliance level of Tuesday4 Feb11.30amTuesday4 Feb12.00pmChinese cross-border listed companies in Australia. Subsequently, this paper concludes with insights for further research.