Photographer: Frederic J. Brown / AFP / Getty Images
Photographer: Frederic J. Brown / AFP / Getty Images
Chinese oil companies may be next on the downside to withdraw from the U.S. after the New York Stock Exchange said last week that it would eliminate the three largest telecommunications companies in the Asian country.
The largest offshore oil producer in China CNOOC Ltd. it could be more at risk as it is on the net According to Henik Fung, an analyst at Bloomberg Intelligence, the list of Pentagon companies that are owned or controlled by the Chinese military. PetroChina Co.Ltd and China Petroleum and Chemical Corp., also known as Sinopec, may also be under threat as the energy sector is crucial to the Chinese military, he said.
“More Chinese companies could be withdrawn in the United States and oil companies could become the next wave,” said Steven Leung, executive director of UOB Kay Hian in Hong Kong. At the same time, the impact of eliminating telecom companies is likely to be minimal, as they traded little in the United States and did not raise much money there, he said.
The NYSE said it would withdraw telecommunications operators to comply with a U.S. executive order that imposes restrictions on companies identified as affiliated with the Chinese military. China Mobile Ltd., China Telecom Corp. Ltd. i China Unicom Hong Kong Ltd. would be suspended from negotiations between Jan. 7 and 11 and procedures have begun to withdraw them, the exchange said.
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China’s Ministry of Commerce responded on Saturday saying the country would take the necessary steps to protect the rights of Chinese companies and hoped the two countries could work together to create a fair and predictable environment for businesses and investors.
China’s Securities Regulatory Commission said Sunday that given its small number of shares traded in the United States, the impact on telecom companies would be limited and that they are well positioned to face any consequences of the downturn.
“The recent move by some political forces in the U.S. to continually and unfoundedly suppress foreign companies listed on U.S. markets, even at the cost of undermining their own position in global capital markets, has shown that the rules and U.S. institutions can become arbitrary, reckless, and unpredictable, ”the CSRC said in a statement on its website.
U.S. President Donald Trump signed an order in November banning U.S. investments in Chinese-owned or military-controlled companies to try to pressure Beijing over what it considers abusive trade practices. The order prohibited U.S. investors from buying and selling shares of a list of Chinese companies designated by the Pentagon as a military binding.
Later, China’s Foreign Ministry accused the US of “brutally defaming” its civil-military integration policies and promised to protect the country’s companies. Chinese officials have done the same threatened to respond to previous actions by the Trump administration with its own blacklist of American companies.
– With the assistance of Max Zimmerman and Gregor Stuart Hunter
(Updates to the CSRC statement in the sixth and seventh paragraphs)