Chinese and U.S. regulators reached an agreement in late August to allow U.S. authorities to vet audits of U.S.–listed companies. The agreement, which was signed by the China Securities Regulatory Commission (CSRC), China's Ministry of Finance, and the U.S. Public Company Accounting Oversight Board (PCAOB), seemingly resolves a long-running point of contention between the two countries. China and Hong Kong are the only two jurisdictions in the world that forbid PCAOB inspections.

But it's not yet clear whether the deal will deliver on its promise. Observers have serious doubts about whether the new agreement will pave the way for unfettered access to Chinese issuers' documents.

A failure to effectively implement it, coupled with a proposed law that would require the U.S. government to assess all outbound investments, might further damage the fractious relationship that currently exists between the two countries. More than 150 U.S.-listed Chinese companies face the threat of expulsion from American bourses by the U.S. Securities and Exchange Commission (SEC) as early as next year, a move that could potentially wipe out trillions of dollars worth of capital for Chinese issuers.