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CSRC Spokesperson Answered Reporter Questions Regarding the NYSE Starting Delisting Process of Three Chinese Telecom Companies
03-01-2021

Reporters: The New York Stock Exchange (NYSE) announced on December 31st 2020 that it had begun delisting proceedings for China Telecom Corp. Ltd., China Mobile Ltd., and China Unicom Hong Kong Ltd. (hereinafter referred to as the three telecom companies). What is the CSRC’s comment on this matter? 

 

CSRC Spokesperson: We have taken note of this development. With their American Depositary Receipts (ADRs) issued and traded on the NYSE for about two decades, the three Chinese telecom companies have always adhered to market rules and regulatory requirement of the U.S. securities markets and have been widely recognized by global investors. The announcement of the NYSE to delist the three telecom companies stems from the executive order of the U.S. administration targeting companies it alleged as connected to the Chinese military. The executive order, which is based on political purposes, have entirely ignored the actual situations of relevant companies and the legitimate rights of the global investors, and severely damaged market rule and order.   

 

The three telecom companies have huge customer bases, sound business fundamentals hence significant position and influence in the global telecommunication service sector. The size of their ADR listings remains small, less than 2.2% in their respective total equity shares, and a total market capitalization of less than 20 billion RMB yuan, among which China Telecom Corp.Ltd. only takes up 800 million RMB yuan, and China Unicom Hong Kong Ltd. stands for 1.2 billion RMB yuan. The liquidity, trading volume and fund-raising functions of the ADRs have been relatively low, therefore the direct impact of a potential delisting would be rather limited on the companies’ growth and general market performance. We firmly support the three companies to safeguard their legitimate rights according to law, and believe they are able to properly handle any negative impact caused by the executive order and potential delisting.   

 

The role of the U.S. as an international financial center, is built on the trust of the global enterprises and investors in the inclusiveness and certainty of its rules and institutions. The recent move by some political forces in the U.S. to continuously and groundlessly suppress foreign companies listed on the U.S. markets, even at the cost of undermining its own position in the global capital markets, has demonstrated that U.S. rules and institutions can become arbitrary, reckless and unpredictable. It is certainly not a wise move. We hope that the U.S. side could show respect for the market and reverence for the rule of law, do more things that can benefit the order of global financial markets, the legitimate rights of investors, and the stability and development of global economy.



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