Five state-run Chinese giants to withdraw from US exchanges
Five of China’s largest state-owned companies, worth hundreds of billions of dollars in market value, will be delisted from the New York Stock Exchange in coming weeks, the companies announced in a flurry of filings on Friday. .
Three of the largest energy companies in the world, PetroChina, Sinopec and Shanghai Petrochemical, said in separate statements that they would seek a voluntary delisting of their US custody shares. Two other public giants, the insurer Life in China and the aluminum producer Chalcoalso said they would stop offering their shares in the United States, citing the administrative burden and costs of maintaining the shares.
Company stock prices fell in early New York trading on Friday, most by around 3%. Together, the companies have a combined market valuation of over $300 billion.
They made their announcements amid growing tensions between Beijing and Washington and greater scrutiny of Chinese companies listed in the United States since Congress passed legislation introducing stricter oversight of such companies in 2020.
US lawmakers have long complained that Chinese companies do not follow the same rules as other publicly traded companies in the United States. Despite years of talks, Beijing and Washington have failed to strike a deal that would allow US regulators to fully inspect the audit documents of US-listed Chinese companies.
A listing on Wall Street, with its deep investor base and liquid market, was once seen as a coveted position for China’s biggest companies and a milestone for those aspiring to go global.
But tensions between China and the United States have spilled over into almost every aspect of the relationship between the two countries, from defense to climate and finance. A controversial trip last week by Speaker Nancy Pelosi to Taiwan, which China has claimed as its own, further inflamed relations. Hours after his visit, Beijing broke off talks on military coordination, climate change and other issues.
China’s market regulator said the moves would not “undermine” the fundraising activities of the five companies, adding that they could choose from multiple markets. The companies will retain their listings in Hong Kong and mainland China.
“These companies have strictly complied with the rules and regulatory requirements of the US capital market since their listing in the United States and made the election for delisting for their own business considerations,” the China Securities Regulatory Commission said in a statement. . statement Friday.
The five companies were added to a list of Chinese companies that failed to meet U.S. regulators’ auditing standards, outlined in the Foreign Corporate Liability Act that was passed in 2020.
Alibaba, the New York-listed Chinese e-commerce giant, is another company that was recently added to the list of more than 270 companies. When news of his addition emerged this month, his US-listed shares fell 11%. The company said last month it would soon seek a primary listing in Hong Kong, a move that would allow more investors from mainland China to invest there.
Didi Chuxing, China’s answer to Uber, was among the first Chinese companies to announce plans to delist from the New York Stock Exchange late last year, marking the end of a multi-year love affair of several billion dollars between China and Wall Street.