New York Stock Exchange (NYSE) delisted three Chinese telecom companies and then reversed its decision. This decision complied with the Trump administration. These three companies include China Mobile (CHL), China Telecom (CHA), and China Unicom (CHU). The decision was taken in late last year by Trump to ban Americans from investing in companies owned by the Chinese military.
NYSE reversed its decision and created a panic among investors. Exchange now once again decided to delist the companies. NYSE has stated this second reversal of decision as “new specific guidance” from U.S. Treasury Department. According to NYSE, trading in securities will be suspended on 11 January.
These three are also listed on the Hong Kong Stock Exchange. The decision to delist the companies has left the investors in a panic. Following the announcement, shares of these companies fell by 8% in Hong Kong. This action is taken to increase the tension between the two giant economies further. The Chinese government has criticized the U.S. government for taking this action, and they are making policies to safeguard the interests of the Chinese firm listed abroad.
All three companies were listed for many years in NYSE. China Mobile has been listed since 1997, China Telecom and China Unicom have been listed since early 2000. These all three companies earn their revenues in China and have no influence in the U.S. like other Chinese firms. Banning these firms is part of the Trump administration’s campaign against the technology sector of China.
United States politicians gave a very welcoming response to this decision. “After an intense pressure campaign from those of us who believe we should prioritize the interests of American workers and mom and pop investors above Beijing and Wall Street, I am pleased that the NYSE decided to reverse their earlier announcement,” said Republican Senator Marco Rubio.” Chinese firms that reject fundamental transparency requirements and have ties to the Chinese military shouldn’t benefit from American investment” said Republican Senator Ben Sasse.
Commerce ministry response was different. The commerce ministry said that the U.S. was “abusing national security and using state power to crack down on Chinese enterprises” and said the move was “not in line with market rules and logic, which harms not only the legitimate rights of Chinese enterprises but also the interests of investors in other countries, including the U.S.” According to the state-run Global Times, China will take necessary measures to safeguard Chinese enterprises’ legitimate rights and interests resolutely.
Trump has also signed an order to ban eight Chinese applications, including Alipay, Tencent, and WeChat. According to the Wall Street Journal, the White House is considering a further ban on Alipay and Tencent. Over 200 Chinese companies are listed in U.S. stock markets, and they have a market capitalization of $2.2 trillion.
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