The New York Stock Exchange said it would begin the process of delisting China Mobile, China Telecom and China Unicom Hong Kong to comply with an executive order issued by the Trump administration. The companies will be suspended from trading between Jan. 7 and Jan. 11.
All three companies have listings in Hong Kong, and the NYSE said they have a right to a review of the decision.
The executive order signed by Donald Trump on November 12 prohibits U.S. investments in Chinese companies that Washington says are owned or controlled by the Chinese military.
“China is increasingly exploiting United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses, which continues to allow the PRC to directly threaten the United States,” the order said.
The order was intended to cut off U.S. investors from buying the stocks of 31 Chinese companies identified by the Defense Department in late August as being affiliated with the China’s military.
The NYSE’s announcement, which was issued late on New Year’s Eve, comes at a time of escalating tensions between China and the U.S. The two countries have been engaged in a trade war for more than two years.
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Chinese companies traded on stock exchanges in the U.S. have been following Alibaba’s lead by conducting secondary listings in Hong Kong. Shares of the e-commerce company began trading in Hong Kong in November 2019, five years after it debuted on the NYSE.
Hong Kong Exchanges & Clearing had earlier adopted rules that allowed companies to list with different classes of shares, which cleared the way for Alibaba and other Chinese tech companies to sell shares in the city.
Alibaba’s rival JD.com and gaming giant NetEase listed their shares in Hong Kong in June this year. KPMG had earlier said the city’s stock exchange would be the world’s second-largest IPO market in 2020 after raising a total of $50 billion in new listings.