(Bloomberg) — A top official at China’s securities watchdog said Chinese firms being delisted from U.S. exchanges would be a setback for the companies as well as for relations with the U.S. as he offered broad support for Hong Kong as an international financial center and venue for stock listings.

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Delistings from the U.S. market would hurt firms, global investors and the China-U.S. relationship, said Shen Bing, director-general of the Department of International Affairs at China Securities Regulatory Commission, at a Securities and Futures Commission forum in Hong Kong. The regulator fully supports Chinese firms in picking Hong Kong as a primary listing venue, he said.

U.S. lawmakers last year enacted a bill that threatens to delist Chinese firms that fail to meet audit inspection rules. The U.S. Securities and Exchange Commission in March began implementing new rules that require U.S. inspection of accounting work done for Chinese firms, though China has long refused to do so citing national security concerns.

The CRSC is “working very hard” to resolve the audit oversight issues with their U.S. counterparts and communication is smooth and open, Shen said.

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China has also tightened requirements for overseas listings, enacting cybersecurity reviews for firms that collect mass data, leading to multiple deals being shelved.

In a panel discussion, Shen also dismissed interpretation of China’s “dual circulation” as a sign the country is “looking inward,” while offering support for Hong Kong and saying the financial center will play a “strong role” for Chinese firms and international investors interested in China.

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