Three Chinese telecommunications companies said on Friday they will be delisted by the New York Stock Exchange in line with U.S. investment restrictions that kicked in during the fag end of the Donald Trump administration.
In separate announcements earlier on Friday, China Mobile Ltd, China Unicom and China Telecom Corp said they expect the NYSE to notify regulators of their delistings after the companies unsuccessfully appealed the move.
The companies said their delistings will be effective 10 days after the exchange completes formalities with the U.S. Securities and Exchange Commission.
The Biden administration has decided to go ahead with the Trump-era hard line on banning business with China’s technology firms that are deemed to pose a threat to the United States.
“Trustworthy information and communications technology and services are essential to our national and economic security and remains a top priority for the Biden Harris administration,” an earlier statement by the Biden administration had said..
The rule had been issued in the final days of the Trump administration in January aimed at addressing information and communications technology supply chain concerns.
The initiative forms part of the strategy to decouple the US economy from China which has exploited western technology and markets to build a monster of an economy that has been fuelling its military build-up.
Firms on black list
The Trump administration had first blacklisted Chinese companies such as telecom giant Huawei, top chipmaker SMIC, drone manufacturer SZ DJI Technology and smartphone maker Xiaomi.
This was followed up with another black list of 58 major Chinese companies which will not be allowed to buy goods or technology from American firms as Beijing is using these companies to build the dragon’s military muscle.
Seven subsidiary companies of Aviation Industry Corporation of China (AVIC) figure on the list which has been published on the US Commerce Department website. American corporate giants General Electric Co and Honeywell International both have joint ventures with AVIC and supply Commercial Aircraft Corporation of China (COMAC), which is spearheading Chinese efforts to compete with Boeing Co and Airbus.
The Trump administration wanted to cut off such links which enable China to get ready access to goods and technology from leading US companies.
The ban could go beyond this list as the Commerce Department has issued an advisory asking all US companies to do their own due diligence as well when dealing with Chinese companies to ensure that they do not have any military ties.
It has expanded the definition of “military end-users,” to include any person or entity that supports or contributes to the maintenance or production of military items even if their business is primarily non-military.
The move came at the fag-end of the Trump administration’s tenure which made a big push against China and highlighted the risks posed by the close relationship between some Chinese companies and the Chinese government.
This policy is being continued under the Biden administration as well.