Chinese state-owned companies withdraw from the New York Stock Exchange

fFive Chinese state-owned companies want to withdraw from the New York Stock Exchange. Life insurer China Life, oil giants Sinopec and PetroChina, aluminum group Chalco and chemical group Sinopec Shanghai Petrochemical announced on Friday that they would delist their US depositary receipts (ADS) before the end of August. They are among the almost 270 Chinese companies that the United States threatened to exclude from the New York Stock Exchange in a law in May because they did not meet the accounting standards of the American auditors.

The governments in Beijing and Washington are negotiating a solution to the dispute. The US is demanding full access to the books and audit records of Chinese companies listed in New York, but China refuses, citing national security. The five companies did not address the issue in their communications. The volumes traded in New York are low. PetroChina said its capital needs could also be met through the Shanghai and Hong Kong stock exchanges, which also “better protect investors’ interests.”

The Chinese stock exchange regulator CSRC emphasized that the companies have always strictly adhered to the rules and requirements of the US capital market since they were listed in New York. The withdrawal from the New York Stock Exchange (NYSE) is a business decision. A visit by US House Speaker Nancy Pelosi to Taiwan last week heightened tensions between the US and China. “China is sending the message that its patience in the balance sheet review negotiations is decreasing,” said Kai Zhan of the Chinese law firm Yuanda, which specializes in the US capital market, among other things. The shares of the five companies willing to say goodbye fell by two to six percent before the market in New York on Friday.

The Chinese stock exchange giants Alibaba, JD.com and Baidu are also threatened with delisting in New York. China Telecom, China Mobile and China Unicom had to leave the US stock market last year because Donald Trump’s US government at the time restricted investments in Chinese technology companies.

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