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China said on Saturday it would take the necessary countermeasures after the New York Stock Exchange (NYSE) began to pull the securities of three Chinese telecommunications companies.
The NYSE announced earlier this week that it would end trading in shares of China Mobile Ltd., China Unicom Hong Kong Ltd. and China Telecom Corp Ltd. by January 11.
The exchange said it made the decision due to an executive order by US President Donald Trump prohibiting Americans from investing in companies linked to the Chinese military.
The move strengthened ties between Washington and Beijing, which opposed trade and the coronavirus pandemic during Trump’s time in the White House.
What has been China’s response?
A spokesperson for the Chinese Department of Commerce said in a statement that delisting from the NYSE “would significantly weaken the confidence of all parties in the US capital market.”
The ministry said the decision to deregister the three telecommunications companies was an abuse of national security and incompatible with market rules.
China “will take the necessary countermeasures to resolutely safeguard the legitimate rights and interests of Chinese enterprises,” the ministry spokesman said, without giving details.
Will delisting from the NYSE affect Chinese companies?
The three telecommunications companies are state-owned enterprises that operate under the firm control of Beijing. These are the only three Chinese companies allowed to provide extensive telecommunications services, an industry the government says should remain state-controlled.
Losing their listing is unlikely to have much of an effect on companies. Besides public funds, the three companies can still attract international investment by selling stocks in Hong Kong.
But write-off is another broken link between the world’s two largest economies. The Trump administration has previously blacklisted electronics giant Huawei and fought to ban social media platform TikTok.
In December, the U.S. Congress passed a bill that would shut U.S. markets to Chinese companies that fail to comply with U.S. financial monitoring or audits.
dv / nm (AP, Reuters)
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