Ali Hasan
In a major blow to China, 3 Chinese telecom companies will be delisted from the New York Stock Exchange very soon due to security concerns. This has been done to comply with a US executive order that imposed restrictions on companies that were identified as affiliated with the Chinese military.
The 3 companies are as follows:-
- China Mobile,
- China Telecom &
- China Unicom Hong Kong
These companies will be delisted between January 7 and January 11 and proceedings to delist them have already started, according to a statement by the NYSE. Earlier, US President Donald Trump on November 12 had signed an executive order that prohibits Americans from investing in 31 firms.
The order prohibited US investors from buying and selling shares in a list of Chinese companies designated by the Pentagon as having military ties. “The Chinese Communist Party’s threat to American national security extends into our financial markets and impacts American investors,” the State Department said in a factual report.
Following the steps of the US and Japan, the Taiwanese Economic Affairs Ministry on Wednesday too tightened control over Chinese investments due to national security concerns. Based on new regulations that came into effect from Wednesday, Chinese military-owned companies and Chinese Communist Party-owned companies were banned from investing in Taiwan.
The move puts trading on the Hong Kong stock exchange under scrutiny after a year of steep losses as President Donald Trump ramped up action against several so-called state-controlled “Communist Chinese military companies” in 2020.
The move worsened US-China relations, already at an all-time low since the trade war, after curbs on Huawei Technologies to Semiconductor Manufacturing International Corp.
Many agree that these companies have separate listings in Hong Kong and generate all the revenue for China without any meaningful presence in the US. Thus using the US soil to generate investments in China which can be described as an abusive business practice.
These companies are involved in civilian and military production with money from US investors. Hence, the decision had to be taken to delist them from the NYSE as soon as possible.
