Xiaomi, CNOOC, Comac: Chinese companies have imposed new US restrictions

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The U.S. Department of Defense on Thursday added nine Chinese companies, including Xiaomi, to a list of companies the agency claims are owned or controlled by the Chinese military. Companies on the list are subject to severe restrictions, including a ban on US investments.
The addition is worrying news for Xiaomi, which was recently surpassed Apple (AAPL) to become the world’s third largest smartphone maker, according to market research firm IDC. Shares of the company fell 10% on Friday during morning trading in Hong Kong.

The Ministry of Defense said in a statement that it is “committed to highlighting and counteracting the relationship between the Chinese military and firms that” appear to be civilian entities, “but which support the military with advanced technology and expertise.

China’s Foreign Ministry did not immediately respond to a request for comment from CNN Business. But Beijing has previously criticized Washington for its actions, saying it would take “necessary steps” to protect the interests of Chinese companies.

The U.S. Department of Commerce also placed CNOOC, China’s largest offshore oil producer, on another list that effectively cuts it off from U.S. supplies and technology. The company was already listed by the Ministry of Defense. CNOOC’s stock fell slightly in Hong Kong.

“CNOOC is acting as a bully for the People’s Liberation Army to intimidate China’s neighbors,” Commerce Secretary Wilbur Ross said in a statement, referring to the country’s military. His agency alleged that CNOOC harassed and threatened offshore oil and gas exploration in the South China Sea.

CNN Business has contacted Xiaomi, CNOOC, Comac and other companies added to the US government lists on Thursday but has not yet received a response.

US banks are scrapping products linked to Chinese equities following the NYSE ban

The measures are the latest in a string of actions taken by the Trump administration against Beijing in the weeks leading up to Biden’s inauguration and could complicate US-China relations for the upcoming administration.

By Thursday, the Pentagon had already added 35 Chinese companies to its military list, including chipmaker SMIC and tech company Huawei. The Department of Commerce has also imposed restrictions on many companies. (SMIC has denied having any relationship with the Chinese military, while Huawei has denied several US allegations that it poses a risk to national security.)

The New York Stock Exchange also announced last week that it would be scrapping three shares of Chinese telecom companies to comply with US President Donald Trump’s executive order prohibiting US investment in certain companies.

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