China said on Saturday it would take the necessary steps after the New York Stock Exchange (NYSE) began withdrawing the securities of three Chinese telecommunications companies.
The NYSE announced earlier this week that it would stop trading shares of China Mobile Ltd., China Unicom Hong Kong Ltd. and China Telecom Corp. Ltd. before January 11th.
The stock market said it made the decision because of an executive order from U.S. President Donald Trump that banned Americans from investing in companies with ties to the Chinese military.
The move has maintained closer ties between Washington and Beijing, which have settled the coronavirus trade and pandemic during Trump’s time in the White House.
What was China’s response?
A spokesman for the Chinese Ministry of Commerce said in a statement that the withdrawal from the NYSE “will significantly weaken the confidence of all parties in the US capital market.”
The ministry said the decision to withdraw the three telecom companies was an abuse of national security and inconsistent with market rules.
China “will take the necessary countermeasures to decisively safeguard the rights and legitimate interests of Chinese companies,” the ministry spokesman said, without naming details.
Will the NYSE downgrade affect Chinese companies?
The three telecommunications companies are state-owned enterprises operating under the firm control of Beijing. They are the only three companies in China that are allowed to provide comprehensive telecommunications services, an industry the government believes should remain under state control.
Loss of your listing is unlikely to affect companies. In addition to state funds, all three companies can attract international investment by selling shares in Hong Kong.
But the downturn is another broken link between the world’s two largest economies. The Trump administration has already blacklisted the electronic giant Huawei and has fought to ban the social media platform TikTok.
In December, the U.S. Congress passed a bill that would close U.S. markets to Chinese companies that do not comply with U.S. financial oversight or audits.
dv / nm (AP, Reuters)