A man walks near the New York Stock Exchange (NYSE) on August 31, 2020 at Wall Street in New York City.Photo: CFP
Yet another Chinese company looked set to be kicked out of the New York Stock Exchange (NYSE) on Tuesday due to last-ditch efforts by then outgoing US President Donald Trump to push for a so-called China-US decoupling, as newly installed US President Joe Biden has made no effort to reverse those mutually destructive policies, dimming the prospect of even a certain degree of de-escalation in China-US ties which are at their lowest point in decades.
While Biden has not taken measures to further ratchet up Trump’s crackdown on Chinese firms, his inaction also underscores his inability or unwillingness to remedy the severe damage to bilateral relations, even as Chinese officials, experts and US businesses have called for healthy competition and cooperation rather than arbitrary decoupling. Moreover, the Biden administration’s designation of China as a strategic competitor also portends a looming cut-throat tech race, analysts said.
In China, top policymakers are taking no chances, as they focus on efforts to boost China’s technological independence and legislation to counter foreign sanctions, interference and long-arm jurisdiction at the ongoing annual legislative and political consultative sessions, or the two sessions.
Chinese state-owned oil giant, China National Offshore Oil Corp (CNOOC), became the latest Chinese company to be pushed out of the NYSE, following an executive order signed by Trump in November 2020 soon after he lost the election to Biden. The executive order sought to bar US investments into Chinese firms it deems to have ties with the Chinese military.
The suspension of CNOOC, which has a market capitalization of $54.36 billion as of Tuesday, follows earlier moves by the NYSE to delist three Chinese telecom operators – China Telecom, China Mobile and China Unicom – on January 11, also citing the Trump executive order. If the executive order were to continue, more Chinese firms, including electronics maker Xiaomi, could face a similar blacklisting.
While the delisting of the three Chinese telecom giants took place before Biden took office, the CNOOC was delisted under Biden’s watch, offering a crucial signal that the new US administration is allowing what some have billed as a financial and technological decoupling to proceed at least for now, despite widespread opposition.
“Biden has not reversed any of Trump’s [policies toward China], nor has he issued new ones. Basically, he wants to keep things the same while [the US] undergoes a review period,” He Weiwen, a former economic and commercial counselor at the Chinese consulates general in San Francisco and New York, told the Global Times on Tuesday.
However, He, who attended the bell-ringing ceremony for CNOOC’s listing at the NYSE about two decades ago, said that China-US relations have come to a completely new phase and a quick fix may be impossible. “While we are still to see what action Biden will take, it’s unlikely that the essential nature [of the US] will change,” he said.
A staffer at CNOOC’s Hong Kong office told the Global Times on Tuesday that the company did not have further information to disclose. In a statement released on February 28, the company said it “regrets” the NYSE’s decision but noted that American depositary shares, or ADS, only amounted to about 0.5 percent of the firms’ total issued share capital.
The three Chinese telecom giants have also expressed similar sentiments, while requesting the NYSE to review its decision. But in an apparent impact of the US’ decoupling efforts, China Telecom, which is also listed in Hong Kong, announced on Tuesday that it would seek an IPO on the Shanghai Stock Exchange. Many Chinese tech firms are also seeking secondary listings in Hong Kong following crackdowns by the US.
Still, some US businesses argue that the Biden administration will not push for a decoupling and that they are hoping for an improved China-US relationship with healthy competition and even cooperation in some areas.
“I don’t think the new administration is increasing its pressure on the bilateral relationship, I think that to the contrary, we can expect some more normalized and more traditional measures of diplomacy,” AmCham China Chairman Greg Gilligan said in response to questions from the Global Times on Tuesday.
He said that the AmCham China opposes the ideal of decoupling and “we’re trying to help to define competition and cooperation in a specific way that allows our member companies to be able to do more business.”
Senior Chinese officials have repeatedly called for healthy competition and cooperation with the US. During a wide-ranging press conference on the sidelines of the two sessions on Sunday, Chinese State Councilor and Foreign Minister Wang Yi said that “what matters is that the two sides should advocate healthy competition on a fair and just basis” and that the two sides should cooperate in areas such as COVID response, economic recovery and climate change.
At a recent forum on China-US relations in Beijing, some US scholars and experts called on China to make more efforts in addition to the positive gesture to resume cooperation with the US. However, some Chinese experts argue that it is the US that should remedy the damage it has inflicted and so far, Biden has seemingly been consumed by domestic affairs.
“The US has prioritized internal affairs and decided not to touch policies toward China, creating a blurry period in the China-US relationship,” Gao Lingyun, a research fellow at the Chinese Academy of Social Sciences in Beijing, told the Global Times on Tuesday, noting that Biden might not seek a “full decoupling” but might seek a “partial decoupling” in key technological fields.
He Weiwen said that while a complete economic decoupling is impossible, particularly in commercial areas, restrictions are tightening on areas related to technologies used in both civilian and military.
“This is about China challenging US dominance and it cannot be resolved simply… the only way out is for us to grow even bigger,” He said.
That sentiment was in vivid display at the ongoing two sessions, where various key documents, including a development plan for the next five years, have prioritized the need to break technological bottlenecks and reach tech independence in core areas.
In a more direct sign of China seeking to boost its shield against US crackdowns on Chinese businesses, Li Zhanshu, chairman of the Standing Committee of the National People’s Congress (NPC), the top legislature, announced in a report on Monday that the committee would work on legislation against external sanctions, interference and long-arm jurisdiction to fill its legal “tool box” to respond to challenges and risks.