China's securities regulator rightly expressed regret over a draconian ruling by a United States Securities and Exchange Commission (SEC) law judge, who ruled to sanction the Chinese affiliates of Big Four auditors last week. In a jaw-dropping decision Thursday, the judge suspended the China units of Deloitte, Ernst & Young, KPMG and PricewaterhouseCoopers -- the four most respected international accounting networks -- for six months for alleged noncompliance with SEC orders to provide certain documents. The decision dramatically raised tensions in what could have been a prime example of cross-border regulation through dialogue and cooperation. The Big Four, which audit hundreds of U.S.-listed companies, including numerous multinational corporations operating in China, have consistently -- and reasonably -- argued that their withholding of the documents was required under Chinese laws designed to protect the country's sensitive information and economic interests. Chinese regulations are the "Law of the Land." By striking a blow to the Big Four firms, which have localized to special general partnerships in the People's Republic of China, the ruling effectively imposed the laws and interests of the United States over those of China, tantamount to the unilateralism of U.S. foreign policy. As it is practically impossible to find suitable replacements for the Big Four, the ruling, in the worst-case scenario, could jeopardize over a hundred Chinese companies' listings and cause problems for multinationals with significant Chinese operations. True, Chinese companies thirst for and have taken considerable advantage of capital markets in the United States of America. But more than just Chinese interests are at stake, as multinational corporations with Chinese operations and international investors in U.S.-listed Chinese stocks are also threatened by the callous ruling. The ruling could also derail the strong momentum of China-based companies with stock offerings in the U.S, but more than just the New York Stock Exchange, London and Hong Kong are keen for high-quality Chinese offerings. The Big Four firms, which employ tens of thousands of professionals in China, said they are caught in the middle of a regulatory standoff between the world's two largest economies. Taking a responsible stand, the China Securities Regulatory Commission (CSRC) and the Ministry of Finance (MOF) have maintained that cooperation based on mutual respect is the only way to handle cross-border regulatory matters. In fact, constructive efforts with input from both sides have already begun to bear fruit, as CSRC and MOF entered into a memorandum of understanding on enforcement cooperation in May of 2013 with the Public Company Accounting Oversight Board, another U.S. regulator Despite tangible progress and an open channel for dialogue between U.S. and Chinese regulators, the SEC was adamant that the judge pursue the case against the Big Four, leading to the fiasco. It is still not too late for a change of heart, as the Big Four will now appeal the ruling to the SEC itself. As the CSRC said Friday, the SEC should make the right judgment, taking into consideration the big picture of cross-border regulatory cooperation between the two countries.