The New York Stock Exchange announced Friday (Jan. 1, 2021) that it will force the delisting of three Chinese state-owned telecommunications giants from the New York Stock Exchange under a U.S. presidential executive order.
The three Chinese state-owned companies are China Mobile, China Unicom and China Telecom. Their shares are traded in the form of American Depositary Receipts (ADRs). Such certificates are issued by U.S. banks to foreign companies that are not registered in the United States, providing a way to facilitate trading of their stocks and bonds in the United States.
The New York Stock Exchange said in a statement that the delisting process has been initiated and that the shares of the three companies will cease trading from Jan. 7 to 11. More Chinese companies will be forced to withdraw from the U.S. securities market in the future.
The action by the NYSE comes as the world’s leading stock index provider MSCI Inc, S&P Dow Jones Indices Inc, FTSE Russell Inc and Nasdaq Inc have all removed various Chinese companies from their respective indexes.
Roger Robinson, a former White House official, said the move was “not big,” but at least it brought awareness to national security and human rights-related “risks.
The presidential order prohibits any U.S. person from engaging in any securities transactions related to the Communist Party’s military enterprises, and in this case, it is clearly appropriate for three companies – China Telecom, China Mobile and China Unicom – to list on the New York Stock Exchange, according to Newscast.
Trump issued an executive order last month calling for a ban on all U.S. persons and U.S. institutions from investing in Chinese companies with military affiliations. The order was to reinstate a 1999 U.S. law requiring the U.S. Department of Defense to come up with a list of Chinese military companies. The Pentagon began enforcing the law last year, and 35 companies have been added to that list, including oil company CNOOC and China’s largest chipmaker, Semiconductor Manufacturing International.
China’s foreign ministry protested the U.S. punishment of Chinese companies with military backgrounds, calling U.S. claims about China’s civil-military integration policy “malicious slander. The Chinese Foreign Ministry also said it will take measures to protect Chinese companies.
U.S.-China relations have become more hostile in the past year. The main issues that have led to the deterioration of relations are China’s major blunders in the early stages of the pandemic, Beijing’s push for a national security law in Hong Kong and the escalation of tensions in the South China Sea.
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