The New York Stock Exchange has said it will list China’s three major state-owned telecommunications companies following an executive order from the Trump administration, in a symbolic breach of the long ties between the Chinese business world and Wall Street.
The stock exchange said in a statement late Thursday that it would halt trading in shares of China Mobile, China Unicom and China Telecom by January 11. He cites an executive order issued by the Trump administration in November that barred Americans from investing in companies with ties. to the Chinese army.
The U.S. Department of Defense previously listed the three companies as significant links with Chinese military and security forces.
The companies in Hong Kong did not immediately respond to requests for comment during the New Year’s holiday.
The delisting was widely expected after the executive order was issued in November. The order was part of a broader effort by U.S. officials to weaken the extensive economic ties between the United States and China, including Chinese access to Wall Street money.
The 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 could raise money from international investors by selling shares in Hong Kong.
The delisting of the three telecommunications giants continues to reflect China’s increase in power and wealth, as well as the growing alienation between the world’s two largest economies. It also highlights the faltering long-standing business ties between the United States and China, which were established over decades when China sought to internationalize and reform its state-owned corporate patterns.
All three companies operate under the permanent control of Beijing. They are ultimately owned by a government agency, the State Supervision Commission for Assets and Administration, and are often ordered to pursue the goals of Beijing. China’s ruling Communist Party sometimes shuffles managers among the three companies.
These are the only three enterprises in China that are allowed to provide broad telecommunications network services, which Beijing considers a strategic industry that should remain under state control.
Such large state-owned enterprises have long been considered by the economists and even some Chinese officials as the growth of the country.
China Mobile, the largest of the three companies, first listed its shares in New York in 1997, at an important time for the Chinese economy. Reform-minded officials in Beijing were trying to get economic growth back on track, after China had deterred foreign investors in Tiananmen Square by 1989 and delayed what officials saw as a necessary overhaul.
One such overhaul has had to do with inflated state-owned enterprises. China’s leaders have forced them to lay off workers and focus on profits and productivity. The thinking took note of listing shares in the United States, and it would be more responsive to investors and more driven to focus on the core.
China Mobile was one of the first major Chinese state-owned enterprises to sell shares in New York. The other telecommunications companies followed, as did state-owned banks, oil companies and airlines. Large private Chinese companies also sold shares there, including Alibaba, the online retail giant, which in 2014 held the world’s largest initial public offering in New York.
Today, China’s need for Wall Street’s money and expertise has diminished. The stock exchanges in Shanghai and Hong Kong are among the largest in the world. With the move, Alibaba last year highlighted shares in Hong Kong, a semi-autonomous Chinese city that allows investors to move money freely across its borders, unlike the mainland.
Chinese leaders’ views on state-owned enterprises have also changed. Xi Jinping, China’s leading leader, spoke about making state-owned enterprises bigger and stronger rather than more streamlined. This has led to concerns among some economists and entrepreneurs that the Chinese government is taking on a greater role in private enterprises.