The New York Stock Exchange (NYSE) has said it will write off three Chinese telecommunications companies over alleged links to the Chinese military.
China Telecom, China Mobile and China Unicom Hong Kong will be suspended from trading in early January, while delisting procedures are initiated, according to a statement issued by the stock exchange.
The NYSE said it had decided that the companies were “no longer suitable for listing” and that it was taking steps to comply with an executive order signed by Donald Trump in November.
The order prohibits transactions in securities “designed to ensure the investment exposure to such securities of any Chinese communist military company” by any person in the United States.
It is designed to prevent US investors from buying or selling shares in companies that are blacklisted by the US government. The White House described the companies as having ties to the Chinese military, a move that was condemned by Beijing.
Companies that will be deregistered have the right to request a review of the NYSE decision.
All three companies are listed in the US and Hong Kong and earn most of their revenue by providing voice and data services in China. They all have a small presence in the US.
Several other Chinese companies have already been removed from lower US 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 world’s two largest economies have risen over the past year over a wide range of issues, including economics, geopolitics, China’s management of the coronavirus pandemic and human rights.
The White House has been seeking for several months to eliminate any dependence on China in the US telecommunications industry.
In April, the Trump administration recommended that U.S. regulators block China Telecom from operating in the United States, warning that the China-backed company poses national security and law enforcement risks for Washington.
The United States 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 imposed severe restrictions on telecommunications giant Huawei and accused it of stealing trade secrets. In addition, Washington has successfully put pressure on Britain to block Huawei from its 5G network.
Telecommunications companies are not the only ones in the US government’s attention.
In a separate executive order signed in December, Trump also threatened to remove Chinese companies from US stock indices unless they comply with US audit standards.