The New York Stock Exchange is delisting three major Chinese companies that have been accused of working with the Chinese military.
China Mobile, China Telecom and China Unicom Hong Kong are being be suspended from trading on U.S. exchanges between January 7 and 11, and proceedings to delist them have started, according to a statement by the New York Stock Exchange.
The move to delist the Chinese stocks follows a U.S. executive order from the White House that imposed restrictions on companies identified as being affiliated with the Chinese military.
In response, China’s Ministry of Commerce said on January 2 that the country will adopt necessary actions to protect the rights of Chinese companies and hopes the two countries can work together to create a fair, predicable environment for businesses and investors.
The three Chinese companies have separate listings in Hong Kong. All generate the entirety of their revenue in China and have no meaningful presence in the U.S. except for their listings on the New York Stock Exchange. Their shares are also thinly traded in the U.S. compared to their primary listings in Hong Kong, making the American delisting more of a symbolic blow amid heightened geopolitical friction between the U.S. and China.
U.S. President Donald Trump signed an order in November barring American investments in Chinese firms owned or controlled by the military, in a bid to pressure Beijing over what it views as abusive business practices. The order prohibits U.S. investors from buying and selling shares in a list of Chinese companies designated by the Pentagon as having military ties.
Global exchanges, including the New York Stock Exchange and Nasdaq courted Chinese companies over the past decade as they attempted to expand their initial public offering (IPO) business, particularly in the technology sector. Companies including e-commerce giants Alibaba Group and JD.Com, which already had listings in New York, conducted secondary listings in Hong Kong in the past two years as tensions between the U.S. and China intensified.