China said Saturday it would take necessary countermeasures after the New York Stock Exchange (NYSE) began deleting securities of three Chinese telecommunications companies.
The NYSE announced earlier this week that it was trading shares of China Mobile Ltd., China Unicom Hong Kong Ltd. and China Telecom Corp Ltd. by 11 January.
The exchange said it made the decision because of an executive order from US President Donald Trump that banned Americans from investing in companies associated with the Chinese military.
The move has further fueled ties between Washington and Beijing, which have sparked trade and the coronavirus pandemic during Trump’s time in the White House.
How did China react?
A spokesman for China’s Ministry of Commerce said in a statement that the NYSE’s deletion “will significantly weaken all parties’ confidence in the US capital market.”
The ministry said the decision to scrap the three telecom companies was an abuse of national security and in violation of market rules.
China “will take the necessary countermeasures to resolutely protect the legitimate rights and interests of Chinese companies,” said the ministry’s spokesman, without giving details.
Will the NYSE deletion affect Chinese companies?
All three telecom companies are state-owned companies operating under the tight control of Beijing. They are the only three companies in China allowed to provide broad telecommunication services, an industry that the government says should remain under state control.
The loss of their listing is unlikely to have much of an impact on the companies. In addition to state funds, the three companies can still attract international investment by selling shares in Hong Kong.
But delisting is another link that is being severed between the world’s two largest economies. The Trump administration has already blacklisted electronics giant Huawei and fought to ban social media platform TikTok.
In December, the US Congress passed a bill that would close US markets to Chinese companies that do not adhere to US supervision or financial audits.
dv / nm (AP, Reuters)