NYSE to Delist China’s Major Telecom Operators

The New York Stock Exchange (NYSE) stated that it would comply with Executive Order 13959 and delist the following securities: China Mobile Comunications (CHL), China Telecommunications Corp (CHA) and China Unicom (Hong Kong) Limited (CHU).

Executive Order 13959 was signed by President Trump on November 12, 2020. According to The Wall Street Journal, the executive order will block Americans from investing in a list of companies the U.S. government says supply and support China’s military, intelligence and security services. The ban starts on January 11, and investors have until November to divest themselves of their holdings.

There are 35 companies on the list – including China’s largest chip maker – as well as surveillance, aerospace, shipbuilding, construction and technology companies, The Wall Street Journal reported.

The Guardian reported that China Mobile Communications, China Telecommunications Corp, and China Unicom (Hong Kong) Limited have the right to request a review of the NYSE’s decision. The Guardian also pointed out: All three firms are listed in the US and Hong Kong, and mostly earn their revenue by providing voice and data services in China. They all have little presence in the U.S.

The delisting of these companies by The New York Stock Exchange is a small part of a series restrictions that appear to be designed to stifle China’s ability to make money from U.S. technology. The various orders either cut off the access of of U.S. technology to several Chinese companies, or by requiring U.S. companies to obtain a license before selling technology to Huawei.

My understanding of this is that the delisting of certain Chinese companies from NYSE might cause them to lose some money. But, if The Guardian is right, the companies don’t make as much money in the United States as they make in China. I’m not entirely certain that the delisting will have much of an impact on those companies ability to thrive outside of the United States.