Amid the ongoing tensions between the US and China over US House Speaker Nancy Pelosi’s visit to Taiwan, five major Chinese companies have announced that they will delist from the New York Stock Exchange. The five companies are –– Sinopec and PetroChina, two of the world’s biggest energy firms, The Aluminum Corporation of China, also known as Chalco, China Life Insurance and a Shanghai-based Sinopec subsidiary.
Notably, all five of these companies are on a list of firms published by the US Securities and Exchange Commission that faced delisting from Wall Street if they did not comply with new audit requirements.
Citing the reasons behind their decision, the companies said that the cost of maintaining the US listings was too high, besides the additional burden of complying with reporting obligations.
Late last year, Chinese authorities had expressed reservations about China-based companies listing in the United States.
Beijing has been extremely livid at Pelosi’s visit to Taiwan, an island nation China considers part of its territory. However, China’s securities regulator on Friday said the moves were made by the companies “out of their own business considerations”.
Notably, a law was passed by the US Congress in 2020 specifically targeting Chinese companies under which the Public Company Accounting Oversight Board (PCAOB) must be able to inspect audits of foreign firms listed on US markets.
Mainland Chinese and Hong Kong companies are notorious for not submitting their financial statements to US-approved auditors.