The NYSE is currently in the process of complying with an executive order by former President Trump to delist CNOOC and other Chinese-based companies. They are being accused of intimidating foreign neighbors and other misdeeds in the South China Sea.

The executive order applies to executives of state-owned companies and officials connected to the Chinese Communist Party. They face restrictions due to alleged manipulation and strong-arming rival states. The ban’s list contains dozens of Chinese companies, but some are more significant than others.

Oil Not Affected

These restrictions would not involve crude or refined fuels nor would they affect partnerships with CNOOC that are not based in the South China Sea. The restrictions concern what Trump’s administration said were links to the Chinese military.

The NYSE’s regulations board stated that CNOOC was “no longer suitable for listing”, and as of yet the Biden administration has not acted to reverse this policy. CNOOC has yet to reply to the recent delisting.

Overseas Trading Still Allowed

The Hong Kong stock exchange will continue to trade shares of CNOOC, but investors in the United States are not easily going to be able to exchange their NYSE shares into overseas shares. This may cause a selling frenzy as the price is anticipated to decline in such an event.

CNOOC is not the only company being scrutinized by the U.S. Nine other Chinese firms said to be connected to the Chinese military were placed on the Pentagon’s list for possible future blacklisting. Two noteworthy names are Comac and Xiaomi, a plane manufacturer and a phone maker.

By November 11, 2021, U.S. investors will be required to divest their positions in these blacklisted companies.

Zhao Lijian, a spokesman for the Chinese foreign ministry, commented on the sanctions. “This action is against the trend of the times and is against its self-touted market competition and international economic trade rules”.

Other Companies Affected

Another rule established during Trump’s presidency applies to technological warfare related to China. This rule will go into effect in March. This other rule allows the Commerce Department to restrict technology business transactions if they determine they present a threat to national security.

Former Secretary of State Mike Pompeo, when the sanctions were announced, stated, “The United States stands with Southeast Asian claimant states seeking to defend their sovereign rights and interests, consistent with the international law”.

Other companies have been greatly affected by delistings. China Mobile Ltd., China Unicom Hong Kong Ltd., and China Telecom Corp lost over $30 billion in total value by the end of December 2020 as shareholders divested and pulled back.

The final toll on the overseas market as well as U.S. investors with holdings in the dozens of companies connected to Trump’s executive order is yet to be known. Biden’s administration is currently in no hurry to reverse the situation.