Xiaomi
The last shot in the US government’s war against the main Chinese smartphone suppliers is aimed at Xiaomi, which today entered the US government’s list of “Chinese Communist Military Companies” through a new executive order. The statement makes it illegal for American citizens to own shares of Xiaomi.
The United States and China have been exchanging blows for a year and a half for Huawei, which was added to the “entity list” by the U.S. Department of Commerce. While on the list of entities, American companies cannot collaborate with Huawei or export products to it. It becomes illegal for Huawei to import any “American-origin” product. Originating in the USA does not just mean products made in the USA by American companies; there is also a “viral” component in the law, where any product made internationally with some components of origin in the United States also counts as a product of origin in the United States.
Although Huawei has been banned completely, it does not appear that Xiaomi is in the same boat right now. Huawei has entered the Commerce Department’s list of entities, while Xiaomi is now on the Defense Department’s list of “Chinese Communist Military Companies” (Huawei is also on this list). The DOD designation appears to prohibit only US investment in Xiaomi, and any American shareholders need to divest their holdings by November 11, 2021. (Xiaomi is a public company and had an IPO in 2018.) The stifling supply chain restrictions that apply to Huawei (yet?) Does not apply to Xiaomi.
The DOD says the list aims to “highlight and contradict the development strategy of the Civil-Military Fusion of the People’s Republic of China (PRC)”, which the government claims is a plan to channel advanced technology to the Chinese military through “PRC companies and universities, and research programs that appear to be civil entities.”
Xiaomi issued an answer on Twitter, saying “it does not belong to, is controlled by or affiliated with the Chinese military and is not a” Chinese Communist Military Company “as defined by the NDAA” (the NDAA is the National Defense Authorization Act that gives DOD the power to do this list).
IDC has Xiaomi as the number 3 smartphone maker worldwide, behind Samsung and Huawei, and a place ahead of Apple. Xiaomi regularly launches high-cost, high-performance Android phones to compete in the relentless Chinese and Indian markets. He started life as an Apple clone maker, but today Xiaomi is one of the fastest in the industry and regularly beats larger companies to send new technologies and components to the market. It has shipped the world’s first Qualcomm Snapdragon 888 phone, the Xiaomi Mi 11, and is leading the way in advancing cameras on display. Being Chinese is a market advantage for Xiaomi. A company like Apple needs U.S. designers to communicate with Chinese manufacturing through a 12-hour time difference and language barrier, while Xiaomi’s Chinese designers and manufacturers can communicate more quickly and easily , allowing the company to develop products faster.
Since Xiaomi may be the third smartphone maker worldwide, any kind of ban from the company in the United States will not do much. Years ago, Xiaomi gave tips on how to enter the smartphone market in the United States, but it never had the stomach to keep it up and instead just launched the American version of Mi.com as a seller of small accessories. In the U.S., you can buy a box, headphones, security cameras and batteries from Xiaomi Android TV, along with weirder things like air fresheners, light bulbs and toy robots.