Xiaomi headquarters
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GUANGZHOU, China – The Trump administration has added smartphone maker Xiaomi to a blacklist of alleged Chinese military companies.
The Chinese company’s Hong Kong-listed shares fell 10.6% at the opening of this news on Friday.
Beijing-based Xiaomi was the world’s third-largest smartphone maker in the third quarter of 2020, according to Counterpoint Research.
This move means that Xiaomi is now subject to a November executive order restricting US investors from buying shares or related securities of any companies designated by the Department of Defense to be a Chinese military company.
Trump’s initial executive order was later extended to force investors to sell or sell the affected stakes until November 11 this year.
Xiaomi was not immediately available for comment when contacted by CNBC.
The company is listed in Hong Kong and not in the USA
“The Department is committed to highlighting and counteracting the development strategy of the military-civilian merger of the People’s Republic of China (PRC), which supports the modernization objectives of the People’s Liberation Army (PLA), ensuring access to advanced technologies and expertise; developed by even those companies in the PRC, universities and research programs that appear to be civilian entities, “DOD said in a statement.
Xiaomi is one of nine entities designated as “Chinese communist military companies.” Comac, a Chinese aircraft manufacturer, is also on the list.
DOD launched its initial list of companies in June 2020. Companies such as Chinese technology giant Huawei and semiconductor manufacturer SMIC are also on the list.