The fourth round of the U.S.-China Strategic and Economic Dialogue will take place in Beijing this coming Thursday and Friday. Tim Geithner and Hillary Clinton will sit across from Vice Premier Wang Qishan and State Councilor Dai Bingguo.
The last time this group met (May 2011) they agreed to try to find a solution to the PCAOB inspection process:
The United States and China welcome continued dialogue between the bilateral competent authorities on the oversight of accounting firms providing audit services for public companies in the two countries, so as to enhance mutual trust and strive to reach agreement on cross-border oversight cooperation. Both countries agree to make joint efforts to accelerate the process.
The parties got off to a good start. A joint PCAOB and SEC delegation went to China in July 2011 to meet with MOF and CSRC officials. PCAOB Board Member Lew Ferguson and SEC Chief Accountant Mike Starr met with CSRC Chairman Shang Fulin. The PCAOB invited the Chinese regulators to come to Washington last October. The October meeting did not happen. I believe that was because the SEC subpoena for Deloitte’s working papers on Longtop caused the Chinese officials to pause, perhaps recognizing that the inspection access would not be an easy issue. They finally got together in January in Washington, but did not report any progress.
It will be interesting to learn whether the issue appears in the fact sheet that will be distributed at the end of the meeting. I am hoping the issue gets the nudge from the dialogue since that may give Chinese officials the political cover to cut a deal.