A few days after the United States moved to delist three Chinese telecom companies from the New York Stock Exchange, China has said it will take “necessary measures” to safeguard the interest of its companies.
The Chinese telecom companies, China Mobile, China Unicorn and China Telecom came under the radar of US authorities following allegations of their ties with the Chinese military. The NYSE said on Thursday it would delist the three companies as part of president Trump’s order in November to bar 31 companies that Washington believed to be owned and controlled by the Chinese military.
The November order prohibits American companies and individuals from owning shares – outright or through investment funds – in companies the administration says help the advancement of the People’s Liberation Army.
“The People’s Republic of China (PRC) is increasingly exploiting United States capital to resource and to enable the development and modernization of its military, intelligence, and other security apparatuses,” the president said in the order.
The investment ban will take effect on Jan. 11, before president-elect, Joe Biden takes office. The NYSE said trading in the three companies will be suspended possibly as soon as Jan.7 or as late as Jan. 11.
But China’s commerce ministry said the move violates market rules and it will take action to protect its firms.
“This kind of abuse of national security and state power to suppress Chinese firms does not comply with market rules and violates market magic,” the ministry said in a statement.
“It not only harms the legal rights of Chinese companies but also damages the interests of investors in other countries, including the United States,” it added.
The move appears to be Trump’s final onslaught on Chinese companies before he leaves office this January. The US Commerce Department added a list of Chinese companies to a trade blacklist in December, over allegations that Beijing is using them to harness civilian technologies for military purposes.
The list includes large state-run aerospace and construction companies, as well as technology and communication companies such as Inspur Group, Huawei and China Telecommunications Corp.
China has called on the United States to meet them half-way and go back to the table of bilateral talks. China’s senior diplomat Wang Yi said in a statement published on Saturday, that the relationship between the two world leading economies has reached a “new crossroads” and “a new window of hope” could now be opened.
The Chinese commerce ministry said: “We hope that the US and China will work together to create a fair, stable and predictable business environment for enterprises and investors, so as to get bilateral economic and trade relations back on track.”
COVID-19 deteriorated the already fragile economic relation between the US and China, with Trump calling the pandemic “China virus” and intensified his attack on companies of Chinese origin operating in the United States since 2020.
Beijing hopes that the soured relationship could be amended after Biden becomes president this year. But Biden said on Monday that he would “hold China’s government accountable for its abuses on trade, technology, human rights, and other fronts,” signaling that he may not dramatically alter the US-China relationship.
It is not clear how exactly Beijing is going to respond to the ban. However, the south Asian giant may be hoping in vain for a better treatment from Biden.