The New York Stock Exchange issued a statement on the 4th that after consultation with regulators, three Chinese telecom operators will no longer be required to delist, thus in just a few days of a major reversal.
This has been described by Edison Lee, director of research at Jeffrey Telecom’s plate, as “the strangest series of events I have ever seen in the United States” in his career.
According to the statement issued by the New York Stock Exchange on December 31, 2020, transactions between China’s three major operators, China Mobile, China Telecom and China Unicom, will be suspended no later than 0.4 local time on January 11, 2021, in order to comply with an executive order issued by the U.S. government last November.
There is nothing new in the sun. In the final analysis, this executive order is an old trick that the outgoing U.S. government is unwilling to leave the scene alone in an attempt to continue to politicize economic and trade issues. The New York Stock Exchange is just regarded as a “gunner” to suppress China.
Now, there must be many considerations behind the revocation of the original decision of the New York Stock Exchange. But one thing is certain: if the original decision is really implemented, it will cause far-reaching harm to the interests of the New York Stock Exchange and the United States.
First of all, China’s three major telecom operators have been trading on the New York Stock Exchange for nearly 20 years through the issuance of American Depositary Receipts (ADRs) and have been complying with the rules and regulatory requirements of the U.S. securities market.
If the New York Stock Exchange cracks down on legitimate and compliant trading enterprises because of an executive order for purely political purposes, it is bound to seriously undermine normal market rules and order, harm the legitimate rights and interests of global investors, and also damage the trust of global enterprises and investors in the New York Stock Exchange.
Secondly, if delisted, the impact of relevant Chinese enterprises will also be limited.
According to the previous response of the China Securities Regulatory Commission, the overall size of the ADR of the three companies is not large, with a total market value of less than 20 billion yuan, accounting for only 2.2% of the total share capital of the three companies.
Among them, China Telecom is only about 800 million yuan, and China Unicom is only about 1.2 billion yuan. “These Chinese companies are cash flow machines and do not require new funding from the United States or anywhere else,” said Peter Millikan, head of Asia Pacific Telecom Research at Deutsche Bank. Therefore, even if it is delisted, the direct impact on the company’s development and market operation is “quite limited”.
More importantly, respect for rules is the foundation of the United States as an international financial center. The so-called decision to delist Chinese enterprises is quite short-sighted, and its negative impact on the United States itself far exceeds expectations.
As a spokesman for the Chinese Foreign Ministry said, the status of the United States as an international financial center depends on the trust of global enterprises and investors in the inclusiveness and certainty of its rules and systems.
The unjustified suppression of foreign companies listed in the United States by the United States will undoubtedly seriously weaken global confidence in the U.S. capital market.
Worryingly, the foundation of this trust is being shaken by some American politicians.
Recently, the United States has surrounded and intercepted Chinese technology enterprises and launched the so-called “network cleaning action” to hinder international telecommunications services, which reflects the “arbitrariness, arbitrariness and uncertainty” of U.S. rules and systems.
This is an irrational move kidnapped by some short-sighted politicians. If the United States deliberately breaks the principles of market competition and international economic and trade rules, it will certainly damage the interests and image of the United States of the United States in the long run.
At present, Sino-US relations have come to a new crossroads, and only by walking opposite directions can we open a “new window of hope”.
Respecting the market, respecting the rule of law and protecting the legitimate rights and interests of investors should be wise choices for both sides.