The New York Stock Exchange said it would remove China’s three large state-owned telecommunications companies from the list after an executive order from the Trump administration, in a symbolic break with long-standing ties between the Chinese business world and Wall Street.
The exchange said in a statement late on Thursday that it would stop trading in shares of China Mobile, China Unicom and China Telecom until Jan. 11. She cited an executive order issued in November by the Trump administration that prohibited Americans from investing in companies with ties to the Chinese military.
The United States Department of Defense had previously listed the three companies as having significant links to Chinese military and security forces.
Company offices in Hong Kong did not immediately respond to requests for comment on Friday, a New Year’s Day holiday.
Removals were widely expected after the executive order was issued in November. The order was part of a broader effort by US officials to weaken the extensive economic ties between the United States and China, including Chinese access to Wall Street money.
The move is likely to have little impact on China’s military or security ambitions, which are generously funded by Beijing, or on the companies themselves, which can raise money from international investors by selling shares in Hong Kong.
Still, the withdrawal of the three telecommunications giants reflects China’s increased power and wealth, as well as the growing distance between the world’s two largest economies. He also highlights the weakening of long-standing trade ties between the United States and China, which were established over decades while China sought to internationalize and reform its state-owned corporate giants.
The three companies operate under the firm control of Beijing. Ultimately, they are owned by a government agency, the State-owned Asset Management and Supervision Commission, and are often required to pursue Beijing’s goals. The Communist Party of China sometimes shuffles executives between the three companies.
They are the only three companies in China that are allowed to provide extensive telecommunications network services, which Beijing considers a strategic industry that must remain under state control.
These large state-controlled companies have long been viewed by economists and even by some Chinese officials as a brake on the country’s growth.
China Mobile, the largest of the three companies, first listed its shares in New York in 1997, at a crucial time for the Chinese economy. Reform officials in Beijing were trying to put economic growth back on track, after China’s crackdown on Tiananmen Square protests in 1989 scared foreign investors and delayed what officials considered necessary revisions.
One of these reforms had to do with bloated state companies. China’s leaders forced them to lay off workers and focus on profits and productivity. Listing stocks in the United States, it was thought, would make them more receptive to investors and more directed at focusing on financial results.
China Mobile was one of the first large Chinese state-owned companies to sell shares in New York. The other telecommunications companies followed, as did state-owned banks, oil companies and airlines. Large private Chinese companies also sold shares there, including Alibaba, the online shopping giant, which in 2014 held what was then the world’s largest IPO in New York.
Today, China’s need for money and Wall Street know-how has diminished. The Shanghai and Hong Kong stock exchanges are among the largest in the world. Highlighting the shift, Alibaba last year listed shares in Hong Kong, a semi-autonomous Chinese city that allows investors to move money freely across its borders, unlike the continent.
Chinese leaders’ views on state-owned companies have also changed. Xi Jinping, China’s top leader, spoke about making state-owned companies bigger and stronger, rather than more efficient. This has raised concerns among some economists and entrepreneurs that the Chinese government is playing a more important role in the private sector.