The New York Stock Exchange (NYSE) has said it will withdraw three Chinese telecommunications companies because of their alleged links to the Chinese military.
China Telecom, China Mobile and China Unicom Hong Kong will be suspended from trading in early January, while withdrawal proceedings begin, according to a statement released by the stock exchange.
The NYSE said it had decided the companies were “no longer eligible for listing” and was taking steps to comply with an executive order signed by Donald Trump in November.
The order prohibits transactions in securities “designed to provide investment exposure to those securities of any Chinese communist military enterprise” by anyone in the U.S.
It is designed to prevent U.S. investors from buying or selling shares in companies listed on the U.S. government blacklist. The White House has designated these companies as linked to the Chinese military, an action that has been condemned by Beijing.
Retiring companies have the right to request a review of the NYSE decision.
All three companies are listed in the United States and Hong Kong and mostly earn their income by providing voice and data services in China. They all have little presence in the US.
Several other Chinese companies have already been withdrawn from the smaller U.S. indices after the executive order.
The order is seen as a new attempt by the Trump administration to put pressure on China over what it considers Beijing’s unfair trade practices.
Tensions between the world’s two largest economies have risen in the past year over a wide range of issues, including economics, geopolitics, handling the coronavirus pandemic in China, and human rights.
The White House has been seeking for several months to eliminate any dependence on China in the U.S. telecommunications industry.
In April, the Trump administration recommended that U.S. regulators prevent China Telecom from operating in the United States, warning that the company with China’s support created national security and law enforcement risks for in Washington.
The United States has expressed concern that China Telecom may be vulnerable to exploitation, influence and control by the Chinese government.
Sign up for Business Today’s daily email or follow Guardian Business on Twitter at @BusinessDesk
Earlier, the U.S. government imposed severe restrictions on telecommunications giant Huawei and accused it of stealing trade secrets. In addition, Washington successfully pressured Britain to block Huawei from its 5G network.
Telecommunications companies are not the only ones in sight of the U.S. government.
In an independent executive order signed in December, Trump also threatened to withdraw Chinese companies from U.S. stock market indices unless they comply with U.S. audit standards.