“The Department is determined to highlight and combat the development strategy of the Military-Civil Fusion of the People’s Republic of China (PRC), which supports the modernization goals of the People’s Liberation Army (ELP), ensuring its access to advanced technologies and knowledge acquired and developed by even those PRC companies, universities and research programs that appear to be civil entities. “
Xiaomi, however, denies its connection to the Chinese military and said it will take steps to protect the company and its shareholders. He said in a statement:
“The Company reiterates that it provides products and services for civil and commercial use. The Company confirms that it does not belong to, is controlled by or affiliated with the Chinese military and is not a ‘Chinese Communist Military Company’ defined in the NDAA. “
CNBC reports that Xiaomi’s shares fell 10.6 percent at the opening on Friday (China time) after the news. The U.S. military blacklist is separate from the list of entities, the country’s commercial blacklist that has prevented American companies from working with Huawei. In addition to Xiaomi, the government has also added aircraft maker Comac to the military blacklist, where it joins state oil giant CNOOC and China’s largest chip maker, SMIC.