The New York Stock Exchange will delist a trio of Chinese telcos as a November executive order from US President Donald Trump enters force on January 11.
The three listed companies hit by the change are China Telecom, China Mobile, and China Unicom Hong Kong.
“The order prohibits, beginning 9:30 am eastern standard time on January 11, 2021, any transaction in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities, of any Communist Chinese military company, by any United States person,” the NYSE said in a statement.
Signed on 12 November 2020, the executive order forbids trading and investing in any of the companies previously deemed to be Communist Chinese military companies by the US Department of Defense, and bans trading in any new companies 60 days after the US places such a label on them.
Besides the three telcos, other large Chinese companies on the list include Huawei, Hikvision, Inspur, Panda Electronics, and Semiconductor Manufacturing International Corporation.
In the executive order, Trump said the People’s Republic of China (PRC) was “exploiting United States capital” to boost and update its military, which allows Beijing to threat the US and its overseas forces, as well as develop “advanced conventional weapons, and malicious cyber-enabled actions against the United States and its people”.
“Through the national strategy of Military-Civil Fusion, the PRC increases the size of the country’s military-industrial complex by compelling civilian Chinese companies to support its military and intelligence activities,” Trump said.
“Those companies, though remaining ostensibly private and civilian, directly support the PRC’s military, intelligence, and security apparatuses and aid in their development and modernisation.”
Trump also said the PRC “exploits United States investors” to finance its military.
“At the same time, those companies raise capital by selling securities to United States investors that trade on public exchanges both here and abroad, lobbying United States index providers and funds to include these securities in market offerings, and engaging in other acts to ensure access to United States capital,” he said.
“To protect the United States homeland and the American people, I hereby declare a national emergency with respect to this threat.”
The winner of the 2020 US presidential election, Joe Biden, is due to be sworn in on January 20.