The New York Stock Exchange will move forward with its original plan to delist three companies linked to the Chinese military, reversing course two days after it said it canceled plans to delist the Chinese firms.
The New York Stock Exchange announced on Wednesday morning that it will delist China Telecom, China Mobile, and China Unicom on Jan. 11 to comply with the Trump administration’s ban on U.S. investments in all firms it considers a “Communist Chinese military company.” The stock exchange’s decision came after the Treasury Department explicitly named the three companies as entities covered by the ban in a Wednesday morning announcement.
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The delisting of the three tech companies is part of a growing bipartisan push to scrutinize Chinese companies operating in the U.S. financial system. Congress in December passed legislation that will force Chinese tech companies to abide by U.S. accounting standards or face delisting. And the Trump administration’s ban—which applies to more than 30 corporations—is expected to lead to the delisting of more companies with ties to the Chinese military.
The stock exchange originally announced plans to delist the three Chinese companies on Dec. 31, only to cancel the delisting action on Monday night. Officials cited a Dec. 28 guidance from the Treasury Department, which said that subsidiaries of restricted Chinese tech companies will not be banned until they are added to the Treasury Department’s ban list and 60 days have elapsed. The official names of the three Chinese tech companies traded in the NYSE did not match the official names listed in the department’s ban list, so NYSE appears to have considered the three firms as subsidiaries that are not covered by the ban.
The Treasury Department did not respond to a request for comment.
The cancellation prompted Treasury Secretary Steven Mnuchin to intervene, telling the exchange that he “disagreed” with the cancellation of the delisting action. The Treasury Department’s Wednesday morning announcement sought to clear up any confusion, saying that any subsidiaries with names that are identical to a banned Chinese military-linked company are banned from trading even if they are not explicitly included in the ban list.
“Transactions in the securities of any Communist Chinese military company subsidiary (whether expressly listed or not) are prohibited if the subsidiary’s name exactly or closely matches the name of these or any other entities identified in the Annex to E.O. 13959 or the name of any Communist Chinese military company listed by the Departments of the Treasury or Defense,” the Wednesday announcement said.
Dan Blumenthal, director of Asian studies at the American Enterprise Institute, said that the Treasury Department has historically hesitated to implement aggressive China policies that might prove economically costly.
“We’ve had policies that make sense from a national security standpoint that are later undone by the Treasury Department or other economics official,” he said. “It’s nothing new—Treasury and Commerce [Department] battling it out with national security officials, particularly on China.”
Sen. Marco Rubio (R., Fla.) castigated the Treasury Department for sowing confusion and undermining national security.
“It is outrageous that those in the U.S. Treasury Department attempted to undermine the President’s Executive Order in a blatant attempt to serve the interests of Wall Street and the Chinese Communist Party at the expense of the United States,” Rubio said in a statement.
Shares of the three tech companies, which temporarily recovered after the stock exchange canceled the delisting, fell on Wednesday. China Telecom shares have dropped by more than 5 percent since Tuesday, while China Mobile and China Unicom each lost about 4 percent of their value. China has vowed to retaliate against American companies, threatening “necessary countermeasures” if the U.S. continues to crack down on Chinese companies.