The New York Stock Exchange (NYSE) said it would remove three Chinese telecommunications companies from the list because of their alleged links to China’s military.
China Telecom, China Mobile and China Unicom Hong Kong will be suspended from trading in early January, while delisting proceedings are underway, according to a statement released by the stock exchange.
The NYSE said it had decided that companies “were no longer suitable for listing” and was taking steps to comply with an executive order signed by Donald Trump in November.
The order prohibits transactions in securities “designed to provide investment exposure to such securities, from any Chinese Communist military company” by anyone in the United States.
It was designed to prevent U.S. investors from buying or selling shares in companies that are blacklisted by the US government. The White House classified these companies as having links to China’s military, a move that Beijing has condemned.
Companies to be removed from the list are entitled to request a review of the NYSE decision.
All three companies are listed in the United States and Hong Kong and mainly earn their revenues from providing voice and data services in China. They all have little presence in the United States.
Several other Chinese companies have already been removed from the lower US indexes after the executive order.
The order is considered a new attempt by the Trump administration to put pressure on China over what it considers Beijing’s unfair trading practices.
Tensions between the two largest economies in the world increased last year on a wide range of issues, including economics, geopolitics, how China is dealing with the coronavirus pandemic and human rights.
The White House has been trying for several months to remove any dependence on China in the United States’ telecommunications sector.
In April, the Trump administration recommended that U.S. regulators prevent China Telecom from operating in the U.S., warning that the China-backed company was creating national security and law enforcement risks for Washington.
The United States has expressed concerns that China Telecom may be vulnerable to the Chinese government’s exploration, influence and control.
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The United States government has already imposed severe restrictions on telecommunications giant Huawei, and accused it of stealing trade secrets. In addition, Washington has successfully lobbied Britain to block Huawei from its 5G network.
Telecommunications companies are not the only ones targeted by the US government.
In a separate executive order signed in December, Trump also threatened to remove Chinese companies from U.S. stock indices, unless they met U.S. audit standards.