Five Chinese state-owned companies have delisted, would there be more on the way? 

Posted on August 25, 2022

-written by Shiqi-

PetroChina Company Limited ($PTR), China Life Insurance ($LFC), Aluminum Corporation of China ($ACH), China Petroleum & Chemical Corporation ($SNP), and Sinopec Shanghai Petrochemical Co ($SHI) have decided to delist from American Depository Shares soon this month.  The news has hit both US and Chinese markets.  However, this is not the first time Chinese companies get delisted from the US market. In 2021, China Telecom, China Mobile, and China Unicom were delisting in response to Donald Trump’s strict restrictions on Chinese technology corporations. 

China and US gave different reasons for delisting this time.  All these five companies have mentioned the low turnover and high administrative cost in their announcements, and US investment takes a small part of the total asset, as Chinese media released the news.  However, the Securities and Exchange Commission (SEC) flagged 273 Chinese companies failing to meet US auditing standards in May, including these five companies.  From the perspective of US, the delisting helped to standardize the auditing system, and five Chinese companies only took a tiny portion of the trading market in America, so it is not a huge loss. 

Nevertheless, delisting is never a welcomed action for both China and US, and true reasons are as follows: 

  • Chinese companies are not willing to reveal too much information for the auditing process, while it does not meet standards from SEC.
  • Furthermore, political pressures have shifted to these giant companies 
  • Besides, Nancy Pelosi’s visit is an explicit trigger.  
  • These five state-owned Chinese companies demonstrated that China is hitting back at America’s political stance.  

More than state-owned companies, privately owned technology giants also face the same auditing problems. I’ll list the following companies which are possibly delisted from the market in the future: 

  • Huaneng Power International, Inc ($HNP)
  • DAQO New Energy Corp ($DQ)
  • JinkoSolar Holding Company Limited ($JKS)
  • Canadian Solar Inc ($CSIQ)
  • TROOPS, Inc ($TROO)
  • ReneSola Ltd ($SOL)