It has been a year-long seesaw battle between Chinese and US financial regulators on access to accounting documents of US-listed Chinese companies. A sign of relief went through the market earlier this year when a deal was reached.

Legal experts hope the US-China Strategic Economic Dialogue - held from July 8 to 12 in Washington - will hammer out the remaining details. With more transparency and better accounting standards, some say a revival in the Chinese IPO market is just around the corner.

For more than two years, US and Chinese regulators have been in a deadlock over how to oversee the auditing of China-based companies that list and trade on US stock exchanges.

Finally, a major breakthrough.

On May 24, the US Public Company Accounting Oversight Board, the China Securities Regulatory Commission, and China’s Ministry of Finance announced an agreement that will allow US regulators to obtain audit documents for enforcement cases.

"There are a lot of gaps in this MOU right now. But I think we have to look at it as it stands today, it is a tremendous accomplishment. They have been working on it for a number of years, there have been many challenges on both sides, I think it spells out how to re-establish the credibility of Chinese companies," Drew Bernstein, Managing Partner of Marcum Bernstein & Pinchuk Llp, said.

The move is hoped to improve the accuracy of audit reports at Chinese firms, increase transparency in accounting, and promote investor confidence.

But there are still plenty of lingering issues regulators need to agree on. Further progress is expected over the next few weeks.