The New York Stock Exchange said it will write off the three major Chinese state-run telecom companies following an executive order from the Trump administration, in a symbolic severance of long-standing ties between the Chinese business world and Wall Street.
The exchange said The current situation Late Thursday, it said it would stop trading in China Mobile, China Unicom and China Telecom shares by January 11th. She cited an executive order. It was released in November By the Trump administration that has banned Americans from investing in companies with ties to the Chinese military.
The US Department of Defense had previously listed the three companies as having significant links with the Chinese military and security forces.
Hong Kong corporate offices did not immediately respond to requests for comment on Friday, the New Year’s holiday.
The delisting was widely expected after the executive order was issued in November. It was part of a wider effort by US officials Weakening of the broad economic ties Between the United States and China, incl Chinese access to Wall Street money.
This move will likely have little impact on China’s military or security ambitions Generously funded By Beijing, or the companies themselves, that can raise money from international investors by selling shares in Hong Kong.
However, the delisting of the three telecoms giants reflects China’s rise in power and wealth, as well as the growing estrangement between the world’s two largest economies. It also highlights the faltering long-standing trade relations between the United States and China, which were forged over decades as China sought to internationalize and reform the giants run by the state.
All three companies operate under the control of the Beijing Corporation. It is ultimately owned by a government agency, the Commission for the Supervision and Management of State-Owned Assets, and is often required to pursue Beijing’s goals. The ruling Communist Party in China sometimes Dodgy executives Among the three companies.
They are the only three companies in China allowed to provide broadband telecom network services, which Beijing regards as a strategic industry that should remain under state control.
Economists and even some Chinese officials have long viewed these large state-controlled companies as hindering the country’s growth.
China Mobile, the largest of the three companies, first listed its shares in New York in 1997, at a pivotal time for the Chinese economy. Reform-minded officials in Beijing had been trying to get economic growth back on track, after China’s 1989 crackdown on the Tiananmen Square protests scared foreign investors and delayed what officials deemed necessary reforms.
One of these reforms had to do with the inflated state-owned enterprises. China’s leaders forced them to lay off workers and focus on profits and productivity. The thinking went that listing stocks in the US would make them more responsive to investors and more focused on the bottom line.
China Mobile was one of the first major Chinese state-owned companies to sell shares in New York. Other telecommunications companies followed suit, as did state banks, oil companies and airlines. Major Chinese private companies have also sold stocks there, including Alibaba, the online shopping giant, which in 2014 retained what it was then. The world’s largest initial public offering in New York.
Today, China’s need for Wall Street money and expertise has diminished. The stock exchanges in Shanghai and Hong Kong are among the largest in the world. Confirming the transformation, Ali Baba last year Stock listed in Hong Kong, A semi-autonomous Chinese city that allows investors to move money freely across its borders, unlike the mainland.
The Chinese leaders ’view of state-owned enterprises has also changed. Xi Jinping, China’s supreme leader, has talked about setting up state enterprises Bigger and stronger Instead of simplifying it. This has led some economists and businessmen to fear the Chinese government Take on a bigger role In a private institution.