China has urged the US to “stop wrongful actions of abusing state power,” as it slammed the recent order from Washington that forced Nasdaq to announce the removal of four Chinese firms from its indexes.
Speaking at a daily news conference, Chinese Foreign Ministry spokesperson Wang Wenbin said Beijing will continue to firmly safeguard the legitimate rights and interests of its companies. He added that Washington’s policies would hurt the interests of global investors, including American investors, but will fail to cut off Chinese businesses from foreign capital inflows.
“Certain companies’ stocks not being included in some global indexes will not prevent international investors from investing in these companies through various other methods and sharing the dividends of China’s development,” Wang said on Monday.
The statement comes on the heels of Nasdaq’s decision to remove the shares of four Chinese construction and manufacturing companies from its indexes. The move, targeting the securities of China Communications Construction Company, China Railway Construction Corporation, CRRC Corporation and Semiconductor Manufacturing International Corporation, is set to come into force on December 21.
Washington has been ramping up pressure on Chinese companies, and last month the Trump administration issued an executive order barring US investors from funding Chinese firms it deemed “Communist Chinese military companies.” The measure was justified by the accusation that the blacklisted companies pose an “unusual and extraordinary” threat to US national security.
The ban, which takes effect on January 11, prohibits “any transaction in publicly traded securities, or any securities that are derivative of, or are designed to provide investment exposure to such securities” with companies listed in the document. Transactions made to divest ownership in the companies will be permitted until November 11, 2021.
Global index providers and exchange traded fund (ETF) providers rushed to adjust to the ban. After consultations with members of the investment community, the S&P and Dow Jones indexes announced last week the exclusion of 10 Chinese companies. Earlier this month, the FTSE Russell said it would remove shares of eight Chinese companies named by the US government from some of its indexes.
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