After pressure, the New York Stock Exchange will delist three Chinese firms.


The New York Stock Exchange reversed course again, saying on Wednesday that it would remove China’s three major state-run telecommunications companies from the exchange.

The decision came after a day of pressure from the Trump administration and Congress following a decision by the exchange to let the companies — China Unicom, China Telecom and China Mobile — remain listed. That twist came a week after the N.Y.S.E. said the company’s shares would be delisted to comply with President Trump’s executive order on China investments.

The exchange said in a statement that it was complying with United States law and that the latest decision came following “new specific guidance” that it received from the Treasury Department’s Office of Foreign Assets Control.

The delisting is likely to further inflame tension between the United States and China in the final days of the Trump administration. The back and forth also reflected the lingering tensions within the administration about how hard a line to take against China, with the Department of Defense and the State Department pushing for a more expansive reading of Mr. Trump’s executive order to block Americans from investing in companies tied to the Chinese military.

Treasury Secretary Steven Mnuchin, who had initially supported greater accommodation of Chinese companies, pushed on Tuesday for the companies to be delisted after Senator Marco Rubio, Republican of Florida, and Pentagon officials expressed outrage that they would remain on the exchange. The Treasury secretary, who was traveling in Egypt on Tuesday, called Stacey Cunningham, president of the N.Y.S.E. Group, to voice his objection to the decision not to delist and issued updated guidance.

A person familiar with the process said that the Treasury Department provided N.Y.S.E with new guidance on Tuesday night that made clear that the companies were covered by the executive order.

The N.Y.S.E. had said a week ago that it was moving ahead with the delistings before backtracking on Monday night after consultations with American regulators, it said. The apparent reprieve led to a sharp rise in the companies’ New York-listed stocks on Tuesday, with China Unicom, for example, gaining nearly 12 percent on the day.

In explaining the initial reversal, the exchange pointed to ambiguity in the White House order about whether it applied to subsidiaries and affiliates. The latest reversal pushed the stocks back down on Wednesday, but not by enough to erase all the previous day’s gains. Over the past year, the companies have each lost more than 30 percent of their value.

China’s securities regulator said in a statement at the start of the week that the companies’ New York listings were worth around 2 percent of their total stock values. Daily trading volumes for the shares in New York are typically a fraction of the much-larger Hong Kong listings.

MSCI, FTSE Russell and S&P Dow Jones Indices have dropped Chinese firms from their global indexes in recent weeks following American restrictions on owning their shares.

The New York Stock Exchange will stop trading of shares in the companies on Jan. 11.

The move won praise from some members of Congress who had been pushing for the United States to sever financial ties with China.

“Chinese firms that reject fundamental transparency requirements and have ties to the Chinese military shouldn’t benefit from American investment,” Senator Ben Sasse, Republican of Nebraska, said on Wednesday.

The Chinese government criticized the Trump administration’s treatment of Chinese companies on Wednesday.

“Some political forces in the United States have been wantonly suppressing foreign companies listed in the country, exposing an arbitrary and capricious uncertainty in its rules and mechanisms,” said Hua Chunying, a spokeswoman for China’s foreign ministry. “The suppression against Chinese companies will have very limited direct impact on them, but at the end of the day, the national interests and image of the United States and the global standing of the American capital market will suffer.”

Jason Karaian contributed reporting.



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