New York Stock Exchange considers delisting China telecoms firms, reversing course

An American flag hangs over the entrance to the New York Stock Exchange.
The New York Stock Exchange’s back-and-forth deliberations over whether to delist the Chinese stocks has confused global financial markets.
(Associated Press)

The New York Stock Exchange is considering proceeding in delisting three major Chinese telecommunications firms after Treasury Secretary Steven T. Mnuchin criticized its shock decision to grant the companies a reprieve, said three people familiar with the matter.

The NYSE’s potential pivot follows a whirlwind 18 hours in which the exchange caught U.S. officials off guard, with the exasperation reaching the highest levels of the Trump administration. The back-and-forth also sowed deep confusion within global financial markets about the policy that set off the remarkable chain of events: an order signed by President Trump in November that requires investors to unload Chinese businesses deemed a threat to U.S. national security.

Mnuchin entered the fray Tuesday, calling NYSE Group Inc. President Stacey Cunningham to express his displeasure with the exchange’s decision to let China Mobile Ltd., China Telecom Corp. and China Unicom Hong Kong Ltd. keep trading on the Big Board, said the people who asked not to be named in discussing a private conversation. Also involved in the administration’s response were Chief of Staff Mark Meadows, National Security Advisor Robert O’Brien and National Economic Council Director Larry Kudlow.


China Mobile paced declines in late trading for the American depositary receipts of the three companies, falling 2.5% to $28.61 at 6 p.m. in New York. The final gyrations of the day shaved about $3.5 billion in collective market value from the trio after each had rallied on the expectation of at least a temporary respite from Trump’s order.

The NYSE first announced it would delist the companies on New Year’s Eve, before changing course four days later. The NYSE’s initial decision was meant to comply with the order but the exchange reversed itself after questions emerged over whether the companies were actually banned, according to people familiar with the matter.

If and when the exchange receives confirmation from the government about what’s prohibited, it will move forward with delisting, the people said. The Treasury Department may also provide further clarification through its Office of Foreign Assets Control, one person said.

NYSE and Treasury spokespeople declined to comment. Treasury released a document Monday that offered further information on the order hours before the exchange announced its decision to allow the companies to keep trading.

The possibility that the firms will still be delisted means financial markets are likely to face further disruptions from Trump’s crackdown on Chinese companies. China Mobile, China Telecom and China Unicom all rallied earlier Tuesday, with investors concluding that the NYSE’s reprieve indicated tensions might be easing between Washington and Beijing.

The order signed by Trump is still scheduled to take effect Jan. 11 — nine days before he leaves office. An official working on Joe Biden’s transition team declined to comment on whether the president-elect would reverse it.

If Biden leaves the order in place, U.S. investment firms and pension funds would be required to sell their holdings in companies linked to the Chinese military by Nov. 11. And if the U.S. determines additional companies have military ties in the future, American investors will be given 60 days from that determination to divest.


Since the start of the COVID-19 pandemic, the Trump administration has ramped up its attacks on China, imposing sanctions over human rights abuses and the nation’s crackdown on Hong Kong. The U.S. has also sought to sever economic links and deny Chinese firms access to American capital.

Hard-liners in the administration — among them Secretary of State Michael R. Pompeo and White House trade advisor Peter Navarro — have warned investors for months that Chinese companies could be delisted from U.S. exchanges. As far back as August, a senior State Department official, Keith Krach, wrote a letter warning universities to divest from Chinese firms ahead of possible delistings.

One of their arguments was that the Chinese companies don’t adhere to internationally accepted accounting practices. The other argument, laid out in Trump’s November executive order, is that many Chinese companies have links to China’s military and pose a threat to American national security.