Trump raises the stakes with plan to delist Chinese firms

Donald Trump with Chinese President Xi Jinping. The US leader’s latest move to limit Chinese firms comes ahead of trade talks between the two countries in early October. (AP)
Updated 29 September 2019

Trump raises the stakes with plan to delist Chinese firms

  • Growing security concerns around company activities prompt US stock exchange threat, sources say

WASHINGTON: President Donald Trump’s administration is considering delisting Chinese companies from US stock exchanges, three sources briefed on the matter said, in what would be a radical escalation of US-China trade tensions.

The move would be part of a broader effort to limit US investment in Chinese companies, two of the sources said. One said it was motivated by the Trump administration’s growing security concerns about the companies’ activities.

Major US stock indexes slipped on the news, which came days before China celebrates the 70th anniversary of the birth of the People’s Republic on Oct. 1, when the world’s No. 2 economy will shut down for a week of festivities.

It was not immediately clear how any delisting would work.

In June, US lawmakers from both parties introduced a bill to force Chinese companies listed on American stock exchanges to submit to regulatory oversight, including providing access to audits, or face delisting.

Chinese authorities have been reluctant to let overseas regulators inspect local accounting firms,  citing national security concerns.

“Beijing should no longer be allowed to shield US-listed Chinese companies from complying with American laws and regulations for financial transparency and accountability,” Republican Senator Marco Rubio said at the time.

One of the sources said the idea of delisting was the latest salvo in this longstanding dispute.

“This is a high priority for the administration. Chinese companies not complying with the PCAOB (Public Company Accounting Oversight Board) process poses risks to US investors,” the source said.

Any plan is subject to approval by Trump, who has given the green light to the discussion, Bloomberg reported, citing a person close to the deliberations.

Officials are also examining how the US could put limits on Chinese companies included in stock indexes managed by US firms.

No decision or action is imminent, two sources said.

As of February, 156 Chinese companies were listed on the NASDAQ and New York Stock Exchanges, according to US government data. 

NYSE declined to comment, while Nasdaq, MSCI, S&P and FTSE Russell did not immediately respond to requests for comment.

China’s yuan currency, traded in offshore markets, fell against the dollar after the news to trade near its weakest against the greenback in about three weeks.

Trade talks between the US and China are expected to be held on Oct. 10-11 after months of tit-for-tat moves by both sides that have weakened global growth.

While the idea of delisting could be a maneuver ahead of those talks, the main aim was to counteract the civilian-military fusion of Chinese tech firms, the Made in China 2025 industrial development program targeting key industries for domination, and a growing surveillance state in Xinjiang, one of the sources said.

The source said there are concerns about US capital enabling these activities, especially as the lines blur between state-owned and private companies in China.


In streaming wars, Disney reaches beyond kids and families

Updated 23 min 48 sec ago

In streaming wars, Disney reaches beyond kids and families

  • Disney’s marketing force is reaching beyond its traditional family audience to send a message that its $7-a-month subscription service Disney+ offers something for all ages

LOS ANGELES: During commercial breaks in a broadcast of World Wrestling Entertainment’s WWE SmackDown, fans were shown ads for Walt Disney Co’s new streaming service, Disney+. So were “Monday Night Football” viewers and video gamers watching Twitch.
“Try to keep up,” said Captain Marvel in one ad after a series of fast-paced clips from “Star Wars,” “The Simpsons,” “The Avengers” and other Disney-owned hits from outside of its deep catalogue of children’s classics.
Disney’s marketing force is reaching beyond its traditional family audience to send a message that its $7-a-month subscription service Disney+ offers something for all ages. The service debuted on Tuesday in the United States, Canada and The Netherlands.
“It’s incumbent upon us to market it the right way to emphasize the fact that it’s not just for kids,” Disney executive Kevin Mayer said during a briefing at the company’s Burbank, California, headquarters. “It’s all family friendly, but everyone can enjoy this product.”
Disney has told investors it can hook 60 million to 90 million customers within about five years as it competes for customers in a crowded streaming market dominated by Netflix Inc. 
Signing up adults who do not have children at home is part of that plan.
Consumers may not realize that after a series of acquisitions Disney is much more than classics like “Cinderella” and “Mary Poppins” that charmed generations of families. The company now owns the celebrated “Star Wars” movie franchise; Iron Man, the Hulk and dozens of other Marvel superheroes; “Toy Story” animation house Pixar, and nature programming channel National Geographic.
Previously released movies and TV series from all of those brands, plus 30 seasons of “The Simpsons,” are available on Disney+ alongside decades of Disney’s family-centric offerings.
Disney+ also offers new programming from those brands.
To raise awareness, the company is promoting Disney+ during sports and primetime TV telecasts to get in front of what Hollywood calls the four quadrants of viewers: male, female, young and old.
“We’re unmatched in quality and appeal across our four-quadrant audience spanning a variety of genres, formats and arenas, and will continue to build on that year after year,” said Ricky Strauss, president of content and marketing for Disney+.
In addition to the wrestling, football and gaming contests, ads ran during the World Series and the ABC News late-night program “Nightline,” and on social media networks.
Early testing in The Netherlands, where Disney offered a free two-month trial of Disney+, attracted a “very large and diverse audience,” said Mayer, who runs Disney’s direct-to-consumer and international unit.
“Marvel’s Agents of SHIELD,” a series aimed at 18- to 49-year olds, ranked as the most-watched piece of content, Mayer said. Next was tween-oriented show “The Suite Life of Zack & Cody” followed by “Disney’s Mickey Mouse Clubhouse,” a cartoon for young children.
“Our hypothesis was we will have a lot of different types of viewership, that it’s not going to be centered among any one of our brands,” Mayer said. “It’s quite a nice confirmation of what we want accomplished.”
The initial response in The Netherlands has cheered industry analysts.
“They have some surprising and encouraging signs about this potential that Disney+ is not just kids and family,” Forrester analyst Jim Nail said.
But unlike Netflix, Disney+ limits how far its programming will go to attract older viewers. To keep it family friendly, the service will not have any R-rated movies or TV shows designated TV-MA for mature audiences.
Programming considered too adult for Disney+ may stream on Hulu, which Disney also owns. That will include FX series such as “American Horror Story” and “Fargo” and possibly movies starring Deadpool, a Marvel character known for foul-mouthed humor, when rights become available.
“There are boundaries to what we’ll put on Disney+,” Mayer said. “’Deadpool’ is definitely not for Disney+.”