Xiaomi’s headquarters
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GUANGZHOU, China – The Trump administration has added smartphone maker Xiaomi to a blacklist of alleged Chinese military companies.
Hong Kong-listed shares of the Chinese company fell 10.6% on Friday opening on that news.
According to Counterpoint Research, Xiaomi was the third largest smartphone maker in the world in the third quarter of 2020.
The move means that Xiaomi is now subject to a November executive order prohibiting US investors from buying stock or related securities from companies designated by the Department of Defense as a Chinese military company.
Trump’s initial execution order was subsequently expanded to force investors to divest or sell affected companies by November 11 of this year.
Xiaomi was not immediately available for comment when contacted by CNBC.
The company is listed in Hong Kong and not in the US.
“ The Ministry is committed to highlighting and countering the military-civilian fusion development strategy of the People’s Republic of China (PRC), which supports the modernization goals of the People’s Liberation Army (PLA) by ensuring access to has advanced technologies and expertise acquired and developed by even those Chinese companies, universities and research programs that appear to be civil entities, ”the DOD said in a statement.
Xiaomi is one of nine entities referred to as “Communist Chinese Military Companies”. Comac, a Chinese aircraft manufacturer, is also on the list.
The DOD published its first list of companies in June 2020. Companies like Chinese technology giant Huawei and semiconductor manufacturer SMIC are also on the list.