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NYSE Moves Ahead With China Stock Delisting Amid Reported White House Pressure

The NYSE reversed its own U-turn Wednesday and will move ahead with plans to delist three China-based stocks with alleged ties to the military

The New York Stock Exchange reversed its own decision not to delist three China-based stocks Wednesday, just hours after it pledged to keep them on the Big Board amid pressure from the White House.

The NYSE said Wednesday that China Telecom Corp.  (CHA) - Get China Telecom Corp. Ltd. Report, China Unicom (Hong Kong)  (CHU) - Get China Unicom (Hong Kong) Ltd. Report and China Mobile Ltd.  (CHL) - Get China Mobile Ltd. Report will be removed from the exchange prior to the start of trading on January 11. 

In a brief statement late Monday, the NYSE had said that "in light of further consultation with relevant regulatory authorities" the three stocks would remain listed despite an an Executive Order from President Donald Trump in November that banned investments by U.S. citizens into 35 companies with alleged ties to the Chinese military. 

The U-turn of its U-turn, however, appears to have been triggered a by a call from Treasury Secretary Steve Mnuchin to NYSE Group President Stacey Cunningham, according to multiple media reports.

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China Mobile shares were marked 3% lower in early trading Wednesday to change hands at $28.50 each, while China Unicom shares edged 0.65% lower to $6.11 each. China Telecom shares were marked 3.7% lower at $27.30 each.

The NYSE chaos underscores, to some degree, the regulatory risks imbedded in China-based stocks amid a crackdown on anti-competitive practices in the tech sector -- including Jack Ma's Alibaba  (BABA) - Get Alibaba Group Holding Limited American Depositary Shares each representing eight Report -- by authorities in Beijing and the impact of years of trade and security tensions between the Trump administration and the government of President Xi Jinping.

However, with President Elect Joe Biden likely to take a less confrontational approach to trade relations with China, possibly even removing some tariffs on goods that have been in place since 2017, the NYSE's interpretation of Trump's Executive Order could suggest an expected thawing of tensions in the months ahead.