Three Chinese companies announced plans to remove shares from the New York Stock Exchange on Friday, adding to the growing financial separation between the biggest global economies because of a dispute over company audits.
PetroChina Ltd. PCCYF, China Life Insurance Ltd. LFC, and China Petroleum Chemical Co SNP, SHI, have no mention of the auditing dispute or U.S. tensions over Taiwan, security, technology and human rights.
The U.S. economy was the worst performing among G-7 countries in the second quarter, as the U.K. also reported a downturn in the second quarter.
The companies, in similarly worded statements, issued within 30 minutes of each other, cited the small trading volumes of their shares in New York. They said that shares would still be traded in Hong Kong, which is open to non-Chinese investors.
Washington warned that Chinese companies including Alibaba Group BABA, the world's biggest e-commerce company, could be forced to leave the U.S. stock exchanges if Beijing refuses to allow regulators to see the records of their corporate auditors.
American authorities say that other governments have agreed to that step, which is required by U.S. law, and China and Hong Kong are the only holdouts. China says that talks are making progress. U.S. officials say important issues are unresolved.
Americans are also being barred from investing in the stocks, bonds and other securities of dozens of companies cited by the Pentagon as possibly supporting China's military development in November 2020, according to a November 2020 order by then-President Donald Trump. The three companies that announced their departures from U.S markets on Friday aren't on the Pentagon blacklist.
Friday s announcement follows Chinese companies that are increasing the role of Hong Kong in connecting them with foreign investors.
Didi Chuxing, China's biggest ride-hailing service, left the New York Stock Exchange on June 10 and joined the Hong Kong exchange. In July, Alibaba announced plans to make Hong Kong-traded shares accessible to mainland investors.
Sinopec, China Life and PetroChina said the securities affected were American depositary shares, or ADS, that represented shares traded in Hong Kong. They said the Hong Kong shares would still be traded.
The Chinese securities regulators said their decision to leave the U.S stock market was based on their own commercial considerations. In a brief statement, it promised to keep in touch with foreign regulators to protect the legitimate rights and interests of enterprises and investors. PetroChina was concerned with the cost of complying with rules in multiple stock markets.
The PetroChina announcement said that exchanges in Hong Kong and Shanghai are strong alternatives that can meet the company's fundraising requirements.
Private companies, including Alibaba, have raised billions of dollars on U.S. exchanges because they were largely shut out of the Chinese financial system, which serves state-owned companies.
Foreign stock exchanges matter less to state-owned companies. The majority of the shares traded in China or Hong Kong are the bulk of their market value.
The New York Stock Exchange announced plans in January 2021 to end trading of shares of China's three main state-owned phone carriers under Trump's orders. The exchange temporarily withdrew the plan, but later said the expulsion would go ahead.