The United States government has blacklisted Chinese smartphone maker Xiaomi for alleged ties with the Chinese military. Comac, a Chinese planemaker, was also added to the list.
Xiaomi and Comac join the growing list of companies blacklisted in the US alleged to be owned or controlled by the Chinese military. US investors in the two Chinese companies will be forced to divest their equity by Nov. 11, 2021, as part of the new U.S. investment ban.
The special list of Chinese linked military companies currently includes 35 firms, including the Semiconductor Manufacturing International Corporation (SMIC), the country’s biggest chipmaker.
Aside from the investment setback, Xiaomi will, fortunately, continue to import US technology and use it in its future devices. Xiaomi’s stock plunged 10 percent after the ban.
Huawei, the long-troubled Chinese smartphone maker, was added to the US Entity list, which is different from the military companies list and has its own consequences.
The US Entity list includes ZTE and Huawei, and dozens of its allies. The Entity List includes over 60 companies, including the world’s largest drone maker, DJI.
Trump will be wrapping up his presidential term on the 20th, and it remains to be seen whether some of his stringent rules against Chinese companies will be overturned by the incoming Biden administration.
Throughout his tenure, Trump has kept Chinese companies on their toes, especially those involved in manufacturing critical technology components like Huawei.
Huawei was ranked second in the smartphone industry before the blacklist and was top of the world’s telecommunication equipment industry.