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The New York Stock Exchange has said it will delist China’s Big Three telecommunications companies following an executive order from the Trump administration, in a symbolic severing of long-standing ties between Chinese business and Wall Street.
The exchange said in a statement Thursday evening that it would suspend trading in shares of China Mobile, China Unicom and China Telecom by January 11. She cited an executive order issued in November by the Trump administration that prohibited Americans from investing in companies with ties. to the Chinese military.
The US Department of Defense previously listed the three companies as having significant ties to Chinese military and security forces.
The companies ‘Hong Kong offices did not immediately respond to requests for comment on Friday, the New Years’ holiday.
The write-offs were widely expected after the decree was issued in November. The order was part of a larger effort by U.S. officials to weaken extensive economic ties between the United States and China, including Chinese access to Wall Street money.
This move is likely to have little impact on China’s military or security ambitions, which are generously funded by Beijing, or on the companies themselves, which can raise funds from international investors by selling shares in Hong Kong.
Yet the delisting of the three telecom giants reflects China’s growing power and wealth, as well as the growing estrangement between the world’s two largest economies. It also highlights the weakness of the long-established U.S.-China trade ties, which were established for decades as China sought to internationalize and reform its state-run corporate giants. .
The three companies operate under the firm control of Beijing. They ultimately belong to a government agency, the Commission for Supervision and Administration of State-Owned Assets, and are often called upon to pursue Beijing’s goals. The ruling Communist Party in China sometimes divides the leadership among the three companies.
These are the only three companies in China authorized to provide extensive telecommunications network services, which Beijing sees as a strategic industry that must remain under state control.
These large, state-controlled companies have long been viewed by economists and even some Chinese officials as a drag on the country’s growth.
China Mobile, the largest of the three companies, first listed its shares in New York in 1997, at a pivotal time for the Chinese economy. Reform officials in Beijing were trying to get economic growth back on track, after China’s crackdown on the Tiananmen Square protests in 1989 scared foreign investors and delayed what officials saw as necessary revisions.
Such an overhaul had to do with bloated state-owned enterprises. The Chinese leaders have forced them to lay off workers and focus on profits and productivity. Listing stocks in the US, it is thought, would make them more responsive to investors and more motivated to focus on the bottom line.
China Mobile was one of the first large Chinese state-owned companies to sell shares in New York City. Other telecommunications companies followed, as did state banks, oil companies and airlines. Large private Chinese companies have also sold shares there, including Alibaba, the online shopping giant, which in 2014 held what was then the world’s largest IPO in New York.
Today, China’s need for Wall Street money and know-how has diminished. The Shanghai and Hong Kong stock exchanges are among the largest in the world. Highlighting the change, Alibaba last year listed shares in Hong Kong, a semi-autonomous Chinese city that allows investors to move money freely across its borders, unlike the mainland.
The view of Chinese leaders on state-owned enterprises has also changed. Xi Jinping, China’s top leader, spoke of making state-owned enterprises bigger and stronger rather than streamlining them. This has led some economists and entrepreneurs to worry that the Chinese government is playing a bigger role in private enterprise.
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