Xiaomi Headquarters
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GUANGZHOU, China – The Trump administration has added smartphone maker Xiaomi to a black list of alleged Chinese military companies.
Hong Kong-listed Chinese company shares fell 10.6% at the opening on Friday with that news.
Beijing-based Xiaomi was the world’s third largest smartphone maker in the third quarter of 2020, according to Counterpoint Research.
The move means that Xiaomi is now subject to an executive order in November that restricts American investors from buying shares or related securities from any companies designated by the Department of Defense as a Chinese military company.
Trump’s initial executive order was later expanded to force investors to divest, or sell, of 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 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 civilian entities, “said the DOD in a statement.
Xiaomi is one of nine entities designated as “Chinese communist military companies”. Chinese aircraft maker Comac is also on the list.
DOD released its initial list of companies in June 2020. Firms such as Chinese technology giant Huawei and semiconductor manufacturer SMIC are also on the list.