Stock exchange says companies are ‘no longer suitable for listing’, in move condemned by Beijing
The New York Stock Exchange (NYSE) has said it will delist three Chinese telecommunications firms because of their alleged links to China’s military.
China Telecom, China Mobile and China Unicom Hong Kong will be suspended from trading in early January, while delisting proceedings are initiated, according to a statement released by the stock exchange.
The NYSE said that it had decided that the companies were “no longer suitable for listing” and was taking action to comply with an executive ordersigned by Donald Trump in November.
The order prohibits transactions in securities “designed to provide investment exposure to such securities, of any Communist Chinese military company” by any person in the US.
It is designed to prevent US investors from buying or selling shares in companies that feature on a US government blacklist. The White House has designated these firms as having links to China’s military, a move that has been condemned by Beijing.
The companies to be delisted have the right to request a review of the NYSE’s decision.
All three firms are listed in the US and Hong Kong, and mostly earn their revenue by providing voice and data services in China. They all have little presence in the US.
Several other Chinese firms have already been removed from smaller US indices following the executive order.
The order is considered to be a fresh attempt by the Trump administration to put pressure on China over what it views as Beijing’s unfair trade practices.
Tensions between the world’s two largest economies have escalated in the past year over a broad range of issues including economics, geopolitics, China’s handling of the coronavirus pandemic and human rights.
The White House has been seeking for several months to remove any reliance on China in the US telecommunications industry.
In April, the Trump administration recommended that US regulators block China Telecom from operating in the US, warning that the China-backed company was creating national security and law enforcement risks for Washington.
The US has voiced concerns that China Telecom could be vulnerable to exploitation, influence and control by the Chinese government.
Telecoms firms are not the only ones in the US government’s sights.
In a separate executive order signed in December, Trump also threatened to remove Chinese companies from US stock indices unless they comply with US auditing standards.
