US Department of Defense (DoD) has branded Xiaomi Corporation as a ” Communist military company” today and this has lead to Xiaomi being blacklisted in the country. Other than Xiaomi there are 8 other companies that have been blacklisted by the Donald Trump-led US government, including China’s state-owned plane manufacturer Commercial Aircraft Corp. of China i.e. Comac. US DoD has claimed that the blacklisted companies are a part of China’s “Military-Civil Fusion development strategy”, through which the Chinese military uses the technologies and expertise developed and acquired by civilian companies, research programs, and universities.
Xiaomi does not sell any smartphones in the US, and only sells internet-connected air purifiers, security cameras, bulbs, plugs, projectors, TV streaming sticks, etc.
This blacklisting scenario led Xiaomi’s shares plunged more than 11%. Xiaomi is China’s one of the biggest technology companies and competes directly with Huawei Technology Co. for the title of the No. 1 Chinese mobile device brand. Xiaomi has a very wide business in technology and alongside smartphones, the company also makes wearables, s=electric scooters, laptops, audio products, and much more.
The blacklisting of these 9 companies in the US means, US investors can no longer invest in these companies including Xiaomi Corporation. On top of that, the US citizens who have existing holdings and share in these companies are ordered to divest the same by November 11, 2021
List of 9 companies blacklisted by the US DoD
- Xiaomi Corporation
- Advanced Micro-Fabrication Equipment Inc.
- Luokong Technology Corporation
- Beijing Zhongguancun Development Investment Center
- Grand China Air Co. Ltd.
- Global Tone Communication Technology Co. Ltd.
- China National Aviation Holding Co. Ltd.
- Commercial Aircraft Corporation of China, Ltd.
- GOWIN Semiconductor Corp.
The release by the US Department of Defense (DoD) stated,
The Department is determined to highlight and counter the People’s Republic of China’s (PRC) Military-Civil Fusion development strategy, which supports the modernization goals of the People’s Liberation Army (PLA) by ensuring its access to advanced technologies and expertise acquired and developed by even those PRC companies, universities, and research programs that appear to be civilian entities.
In response to getting blacklisted in the US, Xiaomi said,
XIAOMI SAYS IT “HAS BEEN IN COMPLIANCE WITH LAW AND OPERATING IN COMPLIANCE WITH THE RELEVANT LAWS AND REGULATIONS OF JURISDICTIONS WHERE IT CONDUCTS ITS BUSINESSES. THE COMPANY REITERATES THAT IT PROVIDES PRODUCTS AND SERVICES FOR CIVILIAN AND COMMERCIAL USE. THE COMPANY CONFIRMS THAT IT IS NOT OWNED, CONTROLLED, OR AFFILIATED WITH THE CHINESE MILITARY, AND IS NOT A “COMMUNIST CHINESE MILITARY COMPANY” DEFINED UNDER THE NDAA. THE COMPANY WILL TAKE APPROPRIATE COURSE OF ACTIONS TO PROTECT THE INTERESTS OF THE COMPANY AND ITS SHAREHOLDERS. THE COMPANY IS REVIEWING THE POTENTIAL CONSEQUENCES OF THIS TO DEVELOP A FULLER UNDERSTANDING OF ITS IMPACT ON THE GROUP. THE COMPANY WILL MAKE FURTHER ANNOUNCEMENTS AS AND WHEN APPROPRIATE.”