Chinese tech stocks extend gains on report U.S. and China nearing auditing agreement
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Alibaba (NYSE:BABA), Baidu (NASDAQ:BIDU), JD.com (NASDAQ:JD) and several other Chinese tech stocks extended their gains on Thursday, after The Wall Street Journal reported that the U.S. and China were nearing an agreement that would let U.S. auditors have access to the records of New York-listed Chinese companies.
The news outlet, citing people familiar with the matter, noted that the Chinese companies listed in New York would transfer their audit papers and other data from China to Hong Kong. Then, regulators from the U.S.'s Public Company Accounting Oversight Board, or PCAOB, would go to Hong Kong and perform on-site inspections.
Alibaba (BABA), Baidu (BIDU), JD.com (JD) and Pinduoduo (NASDAQ:PDD) all gained 5% or more, including a 7% gain for Pinduoduo.
Other Chinese tech stocks, such as NetEase (NTES), Bilibili (BILI), Vipshop Holdings (VIPS) and Kingsoft Cloud Holdings (KC) also saw sharp gains.
The Journal added that China's Securities Regulatory Commission informed several accounting firms and companies about the plan, stating that it could happen as soon as next month.
However, the people familiar with the matter stressed that no final agreement has been reached and that the U.S. would only agree to the deal if they had full access to the records.
If the deal between is finalized and announced, it would mark the end of a years-long tÃªte-Ã -tÃªte between the two countries over the matter of access to the accounting records.
Several Chinese companies, including Alibaba (BABA) and Baidu (BIDU) have been added to the list of companies at risk of facing a delisting as a result of the Holding Foreign Companies Accountable Act, or HFCAA. 
Other major Chinese companies are also on the list of companies facing a possible de-risking, including Weibo (WB) and biotech company BeiGene (BGNE).
The HFCAA tasks the PCAOB to determine companies "that it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction."
The legislation states that a company would be delisted from a U.S. exchange if it was identified by the SEC for three consecutive years because of the PCAOB's inability to audit it properly.
Earlier on Thursday, the Chinese government announced a $146B economic stimulus package meant to spur the domestic economy, sending shares of New York-listed Chinese stocks higher.
Hedge fund Bridgewater Associates disclosed earlier this month that it had sold off all of its holdings in a handful of bellwether Chinese tech stocks, including Alibaba (BABA), JD.com (JD), NetEase (NTES) and Bilibili (BILI), while also making several other changes to its portfolio.