The New York Stock Exchange is beginning the process of listing securities of three Chinese telecommunications companies, after President Trump last month banned US investments in Chinese companies, according to Washington, from being owned or controlled by the military.
The move by the NYSE, which will restrict U.S. investors’ access, follows global index providers MSCI, S&P Dow Jones Indices and FTSE Russell and Nasdaq removing various Chinese companies from their indices.
“This is a modest step, but at least an awakening to national security and human rights-related risks,” said Roger Robinson, a former White House official who supports restricting Chinese access to US investors. .
NYSE said the issuers, China Telecom Corporation Limited, China Mobile Limited and China Unicom (Hong Kong) Limited, are no longer eligible to list because the order prohibits transactions in securities designed to expose such securities of any to offer communism. Chinese military company, by any American person. ”
Trump’s executive order of November has an impact on some of China’s largest companies.
The order sought to give teeth to a 1999 law ordering the Department of Defense to compile a list of Chinese military companies. The Pentagon, which only fulfilled its mandate this year, has so far named 35 companies, including oil company CNOOC and China’s leading record maker, Semiconductor Manufacturing International.
China has condemned the ban, with fund managers saying it could benefit non-US investors who can pick up the shares.
The NYSE has said it will stop trading the stock on January 7 or January 11. The issuers have the right to a review of the decision. Each of the telecommunications companies nominated by the NYSE also has a listing in Hong Kong.
China Telecom is also under fire from the Federal Communications Commission, which said earlier in December that it had begun the process of withdrawing the company’s authorization to operate in the United States.
The companies could not be reached for comment on a public holiday in China.
Ties between Washington and Beijing have become increasingly antagonistic in recent years as the world’s top two economies have splashed over the handling of the coronavirus outbreak, the introduction of a national security law in Hong Kong and the rising tensions in the South China Sea .
Separately, President Trump last month signed a law that would kick Chinese companies off U.S. stock exchanges unless they meet U.S. audit standards. Market participants said it would intensify the rush of Chinese companies listed in the US to seek their listings in Hong Kong.