China said on Saturday it would take the necessary countermeasures after the New York Stock Exchange (NYSE) initiated the closing of shares in three Chinese telecommunications companies.
The NYSE announced earlier this week that it would suspend trading in shares of China Mobile Ltd., China Unicom Hong Kong Ltd. and China Telecom Corp Ltd. on January 11.
The stock exchange said it made the decision because of an executive order from U.S. President Donald Trump that prohibited Americans from investing in companies with ties to the Chinese military.
The move further tightened ties between Washington and Beijing, which opposed the coronavirus trade and pandemic during Trump’s time at the White House.
What was China’s response?
A spokesman for the Chinese Ministry of Commerce said in a statement that the withdrawal from the NYSE “will greatly weaken the confidence of all parties in the US capital market”.
The ministry said the decision to withdraw the three telecommunications companies was an abuse of national security and inconsistent with market rules.
China “will take the necessary countermeasures to resolutely safeguard the legitimate rights and interests of Chinese companies,” said the ministry’s spokesman, without giving details.
Will the NYSE exclusion affect Chinese companies?
All three telecommunications companies are state-owned companies that operate under the firm control of Beijing. They are the only three companies in China that are allowed to provide extensive telecommunications services, an industry that the government believes should remain under state control.
The loss of your listing is unlikely to have much effect on businesses. In addition to state funds, the three companies can still attract international investment by selling shares in Hong Kong.
But going private is another bond broken between the two largest economies in the world. The Trump administration has already blacklisted electronics giant Huawei and fought to ban the social media platform TikTok.
In December, the US Congress passed a bill that would close American markets to Chinese companies that did not comply with US financial supervision or audits.
dv / nm (AP, Reuters)