14 Aug 2022 7:55 am
The shares of hundreds of Chinese companies have also been traded on the New York Stock Exchange (NYSE) for years. Today, several large companies said they would no longer be offering their shares in the US.
Energy company PetroChina Co. Ltd., insurer China Life Insurance Co., Aluminum Corp of China and two other energy sector companies, China Petroleum & Chemical Corp and Sinopec Shanghai Petrochemical Co., said today they would refrain from doing so to have its shares traded on the New York Stock Exchange (NYSE).
PetroChina explained, the company notified the NYSE on Aug. 12 that it was voluntarily delisting its shares. On August 29th, they want to submit the formal application to the SEC, which means that these shares would probably be traded for the last time in New York on September 8th.
In the case of PetroChina, the proportion of total stocks held in the US is very low; it is an estimated 3.93 percent of Hong Kong’s issued shares and only 0.45 percent of the company’s total share capital. In addition to the small volume, it also cites “the significant administrative burden of meeting the disclosure requirements necessary to maintain the listing of the shares on the NYSE due to differences in the different regulatory regimes of different trading venues.”
The SEC had already put 159 Chinese stocks (out of about 250 traded in the US) on its watch list for “delisting” at the end of July. In recent years, the SEC has tightened the requirements for Chinese companies. Mid-2021, so the Global Timesshe announced that Chinese companies would not be allowed to raise capital in the US unless they fully disclosed their legal structure and the risk of the Chinese government intervening in their business.
Die Global Times Xi Junyuang, a professor at Shanghai University of Finance and Economics, quotes: “On a small scale, the SEC is increasingly imposing more hurdles, such as auditing rules or disclosure requirements for Chinese companies. On a larger scale, relations between the two countries have become increasingly uncertain, and it is very likely that the listed companies will experience unfair treatment from the US under such political tensions.” He assumes that other Chinese companies will follow this example.
Even if the economic consequences of this step are very limited, this step is part of a further economic decoupling between the USA and China that is currently emerging.
more on the subject – China does not rule out the possibility of a violent takeover of Taiwan