Five major Chinese companies, including two major oil companies, announced this Friday that they will cease to be listed on the New York Stock Exchange, at a time when companies from the Asian giant are under scrutiny by the US regulator.
In separate statements, the companies oil firm Sinopec and PetroChina, insurance heavyweight China Life Insurance, the aluminum giant Chalco as well as a subsidiary of Sinopec based in Shanghai, stated that they are initiating the paperwork for a "voluntary withdrawal" from the New York Stock Exchange.
The withdrawal takes place in a context of growing tension between Beijing and Washington due to the visit of the Speaker of the US House of Representatives Nancy Pelosi to Taiwan last week, an island that China claims as part of its territory.
Beijing reacted angrily to the visit and conducted military maneuvers of unprecedented scope around the autonomous island. The Chinese executive also suspended cooperation with Washington in areas such as climate change or the fight against drug trafficking.
The five companies were on a list of companies published by the US regulator, the SEC, threatened with removal from Wall Street for failing to comply with the new audit requirements, in force since the end of last year.
The five companies announced in separate statements that they expect to end their listing on Wall Street in early September. All of them justified their decision by pointing out the cost of maintaining the listing in the United States, as well as the burden of complying with the new audit obligations.
In 2020, the US Congress passed a law specifically targeting Chinese companies, under which the Public Company Accounting Oversight Board (PCAOB, a non-profit organization created by Congress itself) must be able to inspect audits of foreign firms listed in the United States.
Mainland Chinese and Hong Kong companies are known for not sending their financial reports to auditors licensed in the United States.
On the list of more than 250 companies at risk of being delisted in the United States is the Chinese e-commerce giant Alibaba.
The Chinese stock market regulator commented for its part that the decision to withdraw from Wall Street was made by the five companies based on their "own business criteria".
The withdrawal "will not affect the continued use by companies of domestic and foreign capital markets for financing and development" of their activities, the Chinese regulator added in a statement.