Move follows Trump’s order banning U.S. investments in Chinese companies allegedly linked to the Chinese military.
The New York Stock Exchange (NYSE) is beginning the process of withdrawing securities from three Chinese telecommunications companies, China Telecom Corporation Limited, China Mobile Limited and China Unicom (Hong Kong) Limited, it said in a statement.
The move comes after U.S. President Donald Trump in November released an executive order banning U.S. investments in Chinese companies that Washington says are owned or controlled by the Chinese military, which which could affect some of China ‘s largest companies.
The November executive order was intended to give teeth to a 1999 law that required the Department of Defense to draw up a list of Chinese military companies. The Pentagon, which only served its term this year, has so far designated 35 companies, including CNOOC Oil Company Ltd. and China’s largest chip maker, Semiconductor Manufacturing International Corp.
Each of the NYSE-designated telecommunications companies also has a list in Hong Kong.
NYSE said the issuers were no longer eligible to trade, as the order prohibits any transaction in securities “designed to provide exposure to the investment in those securities, of any Chinese Communist military enterprise, by anyone in the United States.” .
NYSE said it would suspend trading on Jan. 7 or 11. Issuers have the right to review the decision.
Ties between Washington and Beijing have grown increasingly antagonistically over the past year, as the world’s two largest economies clashed with Beijing’s handling of the coronavirus outbreak, the imposition of a national security law on Hong Kong. Kong and rising tensions in the South China Sea.