Photographer: Frederic J. Brown / AFP / Getty Images
Photographer: Frederic J. Brown / AFP / Getty Images
The main Chinese oil companies could be next in line for the withdrawal from the US after the New York Stock Exchange said last week that it will eliminate the three largest telecommunications companies of the Asian nation.
The largest offshore oil producer in China CNOOC Ltd. could be most at risk because it is on The list of Pentagon companies he says are owned or controlled by the Chinese military, according to Bloomberg Intelligence analyst Henik Fung. PetroChina Co. Ltd. and China Petroleum and Chemical Corp., also known as Sinopec, could also be threatened because the energy sector is crucial to China’s military, he said.
“More Chinese companies could be taken off the market in the US and oil companies could come as the next wave,” said Steven Leung, executive director at UOB Kay Hian in Hong Kong. At the same time, the impact of eliminating telecommunications companies is probably minimal, as they were traded thinly in the US and did not raise too much funds there, he said.
The NYSE said it would eliminate telecommunications operators to comply with a U.S. executive order that restricts companies identified as affiliated with the Chinese military. China Mobile Ltd., China Telecom Corp. Ltd. and China Unicom Hong Kong Ltd. will be suspended from trading between January 7 and January 11, and their write-off procedures have begun, the exchange said.
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China’s Ministry of Commerce responded on Saturday, saying the country will take the necessary steps to protect the rights of Chinese companies and hopes the two countries will be able to work together to create a fair and predictable environment for businesses and investors.
China’s securities regulators said on Sunday that given their small number of shares traded in the US, the impact on telecom companies will be limited and that they are well positioned to deal with any consequences from delisting.
“The recent move by US political forces to continuously and unfoundedly suppress foreign companies listed on US markets, even at the cost of undermining their position in global capital markets, has shown that US rules and institutions can become arbitrary, reckless and unpredictable, ”CSRC said in a statement on its website.
US President Donald Trump signed an order in November to ban US investment in Chinese companies owned or controlled by the military, in an attempt to put pressure on Beijing on what it considers to be abusive trade practices. Order bans US investors from buying and selling shares in a list of Chinese companies designated by the Pentagon as having military ties.
China’s Foreign Ministry later accused the United States of “violent slander” of its civilian-military integration policies and vowed to protect the country’s companies. Chinese officials have also done so they threatened to respond to the Trump administration’s previous actions with their own blacklist of American companies.
– With the assistance of Max Zimmerman and Gregor Stuart Hunter
(Updates to the CSRC statement in the sixth and seventh paragraphs)