The Holding Foreign Companies Accountable Act (“HFCAA” or
“the Act”) threatens to prohibit trading in Chinese companies
listed in the United States if the Public Certified Accounting
Board (“PCAOB”) is unable to oversee their respective Chinese
auditors. By assessing the limits of protection the HFCAA offers
U.S. investors, this Note argues that the statute’s more
fundamental objective is to deter Chinese companies from
listing in the United States. Hence, this Note asks whether the
HFCAA deters or will deter Chinese companies from listing or
remaining listed in the United States. To answer this, this Note
examines data collected by the Author on China-based
company listings to determine the percentage of China-based
company listings on U.S. exchanges over Chinese domestic
listings from 2010 to 2023. The results indicate that a higher
proportion of Chinese firms have opted to list their stocks
domestically since the HFCAA’s passage. Accordingly, the
HFCAA has the consequence of benefitting Chinese and Hong
Kong exchanges while incentivizing Chinese regulators to
increase their control over Chinese companies’ listing
destinations. Given recent developments, such as the PCAOB
receiving full access to inspect Chinese auditors, an evaluation of the deterrent force of the HFCAA is both timely and provides
insight into the ramifications of the HFCAA that will be of
interest for U.S. investors and policymakers.