The New York Stock Exchange (NYSE) has said it will remove three Chinese telecommunications companies because of their alleged ties to China’s military.
China Telecom, China Mobile and China Unicom Hong Kong will be suspended in early January as delisting proceedings begin, according to a statement released by the stock exchange.
The NYSE said it had decided that the companies were “no longer eligible for listing”, and that they were acting to comply with an executive order signed by Donald Trump in November.
The order prohibits transactions in securities “designed to provide exposure to such securities of any Communist Chinese military company” by any person in the United States.
It is designed to prevent U.S. investors from buying or selling shares in companies that appear on a U.S. government blacklist. The White House has identified these ventures as ties to China’s military, which has been condemned by Beijing.
The companies that are removed have the right to request a review of the NYSE decision.
All three of the businesses are listed in the US and Hong Kong and mostly earn their income by providing voice and data services in China. They all have little presence in the US.
Several other Chinese companies have already been removed from smaller U.S. indices following the executive order.
The order is seen as a new attempt by the Trump administration to put pressure on China over what it considers Beijing’s unfair trade practices.
Tensions between the two largest economies in the world have increased over the past year over a wide range of issues, including economics, geopolitics, China’s handling of the coronavirus pandemic and human rights.
The White House has been trying for months to remove China’s dependence on the US telecommunications industry.
In April, the Trump administration recommended that U.S. regulators stop China Telecom from operating in the U.S., warning that the China-backed company poses national risks and law enforcement to Washington.
The US has expressed concern that China Telecom may be vulnerable to exploitation, influence and control by the Chinese government.
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The US government has previously placed severe restrictions on telecommunications giant Huawei, accusing it of stealing trade secrets. In addition, Washington successfully put pressure on Britain to block Huawei from its 5G network.
Telecommunications firms are not the only ones targeting the US government.
In a separate executive order signed in December, Trump also threatened to remove Chinese companies from U.S. stocks unless they meet U.S. audit standards.