The New York Stock Exchange (NYSE) has said it will scrap three Chinese telecommunications companies due to their alleged ties to the Chinese military.
China Telecom, China Mobile and China Unicom Hong Kong will be suspended from trading in early January, while the listing process is initiated, according to a statement from the exchange.
The NYSE said it had decided the companies were “no longer eligible for listing” and was taking action to comply with an executive order signed by Donald Trump in November.
The injunction prohibits transactions in securities “intended to provide exposure to such securities of a Communist Chinese military company” by any person in the US.
It is intended to prevent US investors from buying or selling stock in companies that are blacklisted by the US government. The White House has indicated that these companies have ties to the Chinese military, an action condemned by Beijing.
The companies to be banned have the right to request a review of the NYSE’s decision.
All three companies are publicly traded in the US and Hong Kong and earn their income primarily by providing voice and data services in China. They are all low in the US.
Several other Chinese companies have already been removed from smaller US indices following the executive order.
The order is seen as another attempt by the Trump administration to put pressure on China over what it sees as Beijing’s unfair trade practices.
Tensions between the world’s two largest economies have escalated over the past year over a wide variety of issues, including economics, geopolitics, China’s approach to the coronavirus pandemic and human rights.
The White House has been trying to eliminate China’s reliance on the US telecommunications industry for several months.
In April, the Trump administration advised that US regulators block China Telecom from operating in the US, warning that the China-backed company was creating national security and law enforcement risks for Washington.
The US has expressed concern that China Telecom could be vulnerable to exploitation, influence and control by the Chinese government.
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The US government has previously imposed severe restrictions on telecom giant Huawei, accusing it of stealing trade secrets. In addition, Washington successfully put pressure on Britain to block Huawei from its 5G network.
Telecom companies aren’t the only ones in the US government’s crosshairs.
In a separate executive order signed in December, Trump also threatened to remove Chinese companies from US stock indices unless they meet US auditing standards.