New York Inventory Trade Pressured to Push Forward and Delist three Chinese language Corporations
The Trump administration and members of Congress put pressure on the New York Stock Exchange Tuesday to remove China’s three major state-owned telecommunications companies from the stock exchange.
The exchange late Monday had reversed its original plans announced last week to separate the companies from the government in an attempt to halt American investment in companies related to the Chinese military.
The sudden reversal from Monday’s swap created confusion and reflected the ongoing struggles within the Trump administration over how difficult it is to crack down on China in President Trump’s final days in office. Treasury Secretary Steven Mnuchin has pushed for better housing for Chinese companies, while Defense Department officials have argued that the companies concerned must be delisted for national security reasons.
The Big Board announced late Monday that it had suspended plans to delist the company after consulting with the finance department. The U-turn came a week after the exchange announced it would cease trading shares in China Unicom, China Telecom, and China Mobile by Jan. 11 in response to an order from the Trump administration preventing Americans from getting into business to invest, which are tied to the Chinese military.
Speculation that the reversal was facilitated by Mr. Mnuchin was thrown back on Tuesday by some Chinese hawks in Congress.
“The days of Wall Street and China, which are profiting at the expense of American workers and industry, must come to an end,” said Senator Marco Rubio, Republican of Florida, on Twitter. He said such a move was an “outrageous effort” to undermine President Trump’s executive order.
Economy & Economy
Jan. 5, 2021, 1:06 p.m. ET
The Department of Defense also attacked the decision, telling Bloomberg News on Tuesday that the Chinese Communist Party would keep the companies public, empower them and “promote information gathering”. However, shortly after the statement was released, the Pentagon withdrew it. A Pentagon spokeswoman had no comment.
Finance had no comment on whether Mr Mnuchin had encouraged the exchanges to stop the delistings, and on Tuesday, as he went on an international trip, Mr Mnuchin wanted the exchange to continue his plan to remove the companies. A senior administration official said Mr. Mnuchin called Stacey Cunningham, president of NYSE Group, Tuesday to voice his objection to the decision not to delist.
A spokesman for the New York Stock Exchange did not comment on the call.
The scope of the President’s Executive Order has been the subject of debate. According to someone familiar with the matter, the exchange withdrew its plan to remove the Chinese companies after discovering the language was ambiguous and it was unclear whether the companies needed to be removed.
If the finance department clarifies that the order is for these companies, the exchange will continue with the delisting, this person said.
Another administrative official said an inter-agent discussion was held on Tuesday evening to update the order to make it clear that it applies to the Chinese telecommunications companies.
The exchange’s statement on Monday gave no reason for the decision, although it alluded to the ambiguity of the order and said the move was made “in light of further consultations with the relevant regulators.” The exchange announced that the regulatory department would continue to examine the applicability of the order to the telecommunications companies.
The delisting would have had little practical impact on the companies, which also have Hong Kong-listed shares and are state-owned. Still, the disappearance from the American stock market had a high symbolic value for the deterioration in economic relations between China and the United States.