Well-known Chinese news site NetEase (NASDAQ: NTES) reported on New Year’s Day that the New York Stock Exchange (NYSE) officially announced it will suspend trading of the stocks of China Telecom, China Mobile and China Unicom (Hong Kong) from January 7 to January 11, and delisting these three stocks has started. The action is to comply with the executive order President Trump signed in November, which was to ban investment in companies related to the Chinese military. The executive order does not allow U.S. investors to buy the stock of the companies that made it to the list that the Pentagon provided. This event is a sign that the United States is upping its game on the economic sanctions against China. It is expected that more Chinese companies will be forced out of the U.S. stock market in the future.
On January 5, Singapore’s primary Chinese newspaper Lianhe Zaobao reported that the NYSE decided to stop the delisting process of the three Chinese companies. This was right after the Chinese Ministry of Commerce’s statement on the willingness to take the “necessary steps” to counter the delisting. The report did not explain why the NYSE changed its mind.
Again on January 5, the BBC Chinese Edition reported that the NYSE decided to change its opinion for the second time and would continue the delisting of the three Chinese telecommunications giants. The new announcement said the decision was made based on the latest detailed instructions from the Department of the Treasury. This sudden and unexpected change caused stock market volatility.
China Mobile is China’s largest telecommunications provider with 946 million customers. It also has the world’s largest mobile network and customer population. China Telecom is China’s second largest telecommunications provider, with 346 million customers. The U.S. FCC withdrew China Telecom’s license to operate in the U.S. on December 10. China Unicom, also serving Hong Kong, is China state-owned and is the world’s fourth largest telecommunications company.
(1) NetEase, January 1, 2021
(2) Lianhe Zaobao, January 5, 2021
(3) BBC Chinese, January 5, 2021