Delisting three Chinese telecommunications firms from NYSE for ‘political links’

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The stock exchange notes that the companies are “no longer suitable for listing” in a move condemned by Beijing.

Because of their supposed links to the Chinese military, the New York Stock Exchange (NYSE) has announced it would declassify three Chinese telecommunications firms.

China Telecom, China Mobile and China Unicom Hong Kong will be suspended from trading at the beginning of January, the exchange said in a statement, while delisting proceedings are launched.

The NYSE said it had determined that the firms were “no longer eligible” for listing and was taking steps to comply with an executive order signed in November by Donald Trump.

The order prohibits transactions by any individual in the United States in securities “designed to provide investment exposure to such securities of a Chinese communist military company”

It is planned to prohibit U.S. investors from purchasing or selling stock in U.S. government blacklisted businesses. Those businesses have been designated by the White House as having ties to the Chinese military, a move denounced by Beijing.

Companies which are to be excluded from the list have the right to request a review of the decision of the NYSE.

In the U.S. and Hong Kong, all three firms are listed and derive much of their revenue from offering voice and data services in China. Many of them only have a limited presence in the United States.

Several other Chinese businesses since the Executive Order was issued have also been withdrawn from smaller U.S. indexes.

The order is seen as a renewed effort to bring pressure on China by the Trump administration, saying that Beijing’s unfair trade practices are incorrect.

Over the past year, over a broad range of topics, including the economy, geopolitics, China’s handling of the coronavirus pandemic, and human rights, tensions between the world’s two largest economies have intensified.

For several months, the White House has been seeking to end China’s dependency on the U.S. telecommunications market.

The Trump administration proposed in April that U.S. regulators bar China Telecom from operating in the U.S., warning that in Washington, the Chinese-backed firm was causing national security and law enforcement threats.

The U.S. has raised concerns that China Telecom may be vulnerable to the Chinese government’s manipulation, power, and control.

Telecom giant Huawei has previously been tightly restricted by the U.S. government, accusing it of stealing trade secrets.

Furthermore, the UK has been effectively lobbied by Washington to remove Huawei from its 5G network.

Telecom firms are not the only ones that the U.S. government is targeting.

In a separate executive order signed in December, if they do not comply with U.S. auditing requirements, Trump has threatened to exclude Chinese firms from U.S. stock indices.

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