Major Taiwanese news network China Times recently reported that, starting in December and January, the S&P and Dow Jones Indexes will remove 21 Chinese Mainland companies from stock and bond index component lists. A week ago, FTSE Russell also announced the removal of Chinese components from its global series of indexes. U.S. President Trump issued an executive order on December 11 requiring U.S. investors and agencies to remove their stakes in companies related to the Chinese military, with a list of 31 entities. The U.S. Department of Defense also listed four additional Chinese companies in their blacklist. Some of the blacklisted Chinese companies are well-known and large-scale companies, such as SMIC (China’s top domestic chip maker), Hikvision (the world’s largest video surveillance manufacturer), and China National Offshore Oil Corporation (CNOOC, China’s third largest oil company). The U.S. House of Representatives also passed a bill on December 1, requiring the removal for three years of all foreign companies listed in the U.S. stock markets that have not complied with the audit standards set by PCAOB (Public Company Accounting Oversight Board). SMIC and Hikvision declined to comment on the news.
Source: China Times, December 10, 2020