Xiaomi is not wasting time challenging the US decision to include it on a list of Chinese companies supported by the military and to ban American investments. Reuters reports that the Chinese telephone giant filed a lawsuit against the US Department of Defense and Treasury, classifying the investment ban as “illegal and unconstitutional”. He also said that allegations of links to the Chinese military were false and that a lack of American investment would lead to “immediate and irreparable damage”.
The company said that 75 percent of its voting rights belonged to co-founders Lin Bin and Lei Jun, and that there were no persons or organizations linked to the military with ownership. He also noted that a “substantial number” of shareholders were American, and that three of his most prominent shareholders were American investment groups.
In addition, Xiaomi said the very implication of ties to the Chinese military “would significantly harm” its business.
It is unclear whether Xiaomi will do well to avoid the actual blacklist, which goes into effect on March 15. However, the company’s product mix can work to your advantage. Unlike Huawei, Xiaomi does not have a telecommunications infrastructure business that can raise espionage issues, guaranteed or not. It could be argued that the military would not need to partner with a company focused on conventional smartphones and smart home devices. Whether the authorities see it that way or not, it’s another story – the US has not given damages to Huawei and other Chinese companies, despite the new White House and several challenges.