China's securities regulator has proposed changes to key rules on Chinese companies listed abroad in a move that could ease a long-standing auditing dispute with the United States.

In revised draft rules released on Saturday, the China Securities Regulatory Commission (CSRC) withdrew a requirement that only Chinese regulators conduct on-site audit inspections of Chinese companies listed overseas.

The changes were made to "accommodate the new circumstances and developments concerning overseas securities listings and offerings" and Chinese regulators' "open attitude" in audit oversight cooperation, the commission said in a joint statement with various agencies including the Ministry of Finance.

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"China remains committed to supporting eligible companies of all types list or offer securities in overseas markets," they said.

More than 200 mainland Chinese companies are listed on US exchanges.

In recent years, US regulators have increased scrutiny of the accounting standards of these companies amid allegations of ties to the military and use of forced labour in the Xinjiang Uygur autonomous region.

China has long denied US securities regulators the ability to inspect the financial audits of its US-listed companies, saying they contain state secrets.

The tensions culminated in 2019 with the US Holding Foreign Companies Accountable Act, which requires foreign companies listed in the US comply with audit inspection rules under the auspices of the Public Company Accounting Oversight Board (PCAOB) or face delisting within three years.

In the aftermath, US-listed Chinese companies were hit by bruising sell-offs.

In March, the Securities and Exchange Commission (SEC) identified 11 Chinese companies - including Baidu, Weibo and BeiGene and Yum China - liable under the law.

In the statement on Saturday, the CSRC said the proposed rules offered more guidance on protecting state secrets.

In practice, it is rare that companies need to provide documents that contain state secrets and sensitive information, according to the CSRC.

But should the situation arise, the burden of ensuring information security would fall on the Chinese companies, it said.

The amendments have been released for public feedback until April 17.

Louis Tse Ming-kwong, managing director at Wealthy Securities, said the proposed changes were a good start.