Chinese stocks may start exiting the U.S. in two years, warns Asian Corporate Governance Association

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The delisting of Chinese stocks in the U.S. may come in the next two to three years, warns Jamie Allen of the Asian Corporate Governance Association.

that regulators from the United States and China are progressing toward a cooperation plan on U.S.-listed Chinese stocks.Many Chinese firms have used the variable interest entity structure to list stateside. That's done by creating a listing through a shell company, often based in the Cayman Islands, in effect preventing investors in the U.S.-listed shares from having majority voting rights over the Chinese company.

For now, the Chinese government appears "willing to live" with the VIE structure despite it existing in a "very gray area" that does not technically comply with China's national policy on foreign ownership of sensitive sectors, Allen said.

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