Five Chinese Companies Including Sinopec Voluntarily Delist from New York Stock Exchange

Sinopec Gas Station Signboard

On the 12th, Chinese local media reported that five Chinese companies have decided to voluntarily delist from the New York Stock Exchange (NYSE) in the United States.

According to the reports, five companies including the Chinese state-owned oil company China Petrochemical Corporation (Sinopec) and its subsidiary Sinopec Shanghai Petrochemical, PetroChina, Aluminum Corporation of China (Chalco), and China Life Insurance notified the NYSE of their voluntary delisting on the same day. They explained, "We will submit the voluntary delisting application between August 20 and 25," and "the delisting will take place about 10 days later." The reasons cited for the voluntary delisting decision included the relatively small proportion of shares listed on the NYSE and the heavy burden of maintaining listing obligations.

The push for voluntary delisting came amid the U.S. Securities and Exchange Commission's (SEC) move this year to place many Chinese companies listed on the NYSE on a preliminary delisting list. The SEC, which has been in conflict with China over accounting oversight of Chinese companies listed on the U.S. stock market, has added 159 Chinese companies to the preliminary delisting list since March. There are 270 Chinese companies listed on the U.S. stock market. This is in accordance with the U.S. Holding Foreign Companies Accountable Act (HFCAA), passed in 2020, which mandates the removal of foreign companies from the stock market if they fail to meet their home country’s accounting standards for three consecutive years.

Major Chinese companies included in the list are Alibaba, the largest e-commerce company in China; Baidu, the largest search engine company; Sohu.com, a portal site; and Weibo, the largest social media platform in China.

China has been pushing to revise accounting regulations for overseas-listed companies and has been negotiating with the U.S. to prevent the delisting of its companies. Some analysts predict that the number of Chinese companies voluntarily delisting from the U.S. stock market will increase amid escalating U.S.-China tensions following U.S. House Speaker Nancy Pelosi's visit to Taiwan.