China said on Saturday it would take the necessary countermeasures after the New York Stock Exchange (NYSE) began delisting securities of three Chinese telecommunications companies.
The NYSE announced earlier this week that it will stop trading China Mobile Ltd., China Unicom Hong Kong Ltd. and China Telecom Corp Ltd. until January 11th.
The stock market said it made the decision because of an executive order by US President Donald Trump, which banned Americans from investing in companies with ties to the Chinese military.
This move has closer ties between Washington and Beijing, which focused on the coronavirus trade and pandemic during the Trump White House period.
What was China’s response?
A spokesman for the Chinese Ministry of Commerce said in a statement that the withdrawal from the NYSE would “considerably weaken the confidence of all parties in the US capital market”.
The ministry said the decision to deregister the three telecommunications companies was an abuse of national security and incompatible with market rules.
China “will take the necessary steps to resolutely protect the rights and legitimate interests of Chinese companies,” the ministry spokesman said without elaborating.
Will the NYSE affect the deregistration of Chinese companies?
All three telecommunications companies are state-owned enterprises operating under the firm control of Beijing. These are the only three companies in China that are allowed to provide extensive telecommunications services, an industry the government believes should remain under state control.
Losing their listing is unlikely to have a significant effect on companies. In addition to state funds, the three companies can also attract international investment by selling shares in Hong Kong.
But delisting is another broken link between the world’s two largest economies. The Trump administration has already blacklisted the electronic giant Huawei and fought to ban the social networking platform TikTok.
In December, the US Congress passed a bill that would close US markets to Chinese companies that do not comply with US oversight or financial audits.
dv / nm (AP, Reuters)