Since the unwarranted visits of US House Representative Speaker Nancy Pelosi to Taiwan, the political relations between USA and China have soured. According to a recent article published by Bloomberg, five major Chinese state-owned companies are set to get delisted from the New York Stock Exchange (NYSE). The report claims that the Chinese companies include China Life Insurance and Chinese oil giant Sinopec among others.
The move has arrived at a critical point when the economic and diplomatic strain between the US and Chinese governments is deepening. The heads of the Chinese organizations have claimed that they are also planning to file for delisting from American Depository Shares by the end of the ongoing month. If the delisting goes forward it can cement the possibility of a real clash between the two world powers.
Survival of Chinese Companies in the US
The other two major Chinese companies Aluminum Corporation of China and PetroChina are preparing for the departure from US markets. The five Chinese corporations that joined the Holding Foreign Companies Act or HFCAA in May are already showing a lack of interest. The Bloomberg report claimed that the companies were absent from all the regulatory meetings with US regulators to comply with auditing standards and maintain their listing status.
On the other hand, the companies are planning to continue their listings in Hong Kong and mainland Chinese stock markets. Yuanda, Chinese Law Firm Senior Counsel Kai Zhan claimed that China is sending a message to the USA about its tolerance by bunking the audit talks. Meanwhile, Washington has demanded a detailed account of all Chinese companies listed in the US.
To counter the US sanctions and US Capital Market inspections, Beijing has barred any type of foreign intervention or audit records for local accounting firms under the purview of national security measures. Other big companies that are opting for delisting are China Life and Chalco which are preparing their delisting documentation for submission on 22nd August marking a period only ten days after the walkout of Sinopec and Petro China.
At the same time, three major Telecommunication companies China Telecom, China Mobile, and China Unicom were already delisted from the US in 2021 during the Trump administration. The sanctions barring Chinese tech firms from entering the US markets are carried forward by Biden Administration which has further contributed to extending tensions between the two nations.