The Trump administration is adding pressures as much as possible on China in its last few days. Under the National Defense Authorization Act of 1999, the Trump administration added Xiaomi to the US military list. Xiaomi is the third-largest smartphone maker in the world. This has restricted American investors from purchasing the Xiaomi shares or related securities anymore. That’s not all! Trump has signed an order lately, which demands the American shareholders of Xiaomi to sell their shares by November 11th this year. IDC, Counterpoint Research and Gartner have reported that the USA has designated, Xiaomi as a company owned by the Chinese military.
When questioned about their updated list, the Defence Department announced that they are determined on highlighting and fighting against the Military-Civil Fusion development strategy used by the People’s Republic of China’s (PRC). They also claim that these strategies support the People’s Liberation Army (PLA)’s modernization goals.
However, Xiaomi denies these claims of being connected with the Chinese military and said that it will take actions to protect the company and its stockholders. It said in a statement:
Xiaomi issued a statement where they strictly highlighted that their goods and services only support the civilian and commercial use. They continue to say that by any means they are not controlled or associated with the Chinese military and they are not a ‘Communist Chinese Military Company’ established under the NDAA as claimed by some.
CNBC announces that Xiaomi’s shares fell 10.6% at the on Friday after the news broke out. The US military blacklist is separate from the entity list which is the trade blacklist of the country. It was the entity blacklist that prohibited the US companies from working with Huawei. Apart from Xiaomi, the administration has added Comac, the plane manufacturer to the military blacklist. China National Offshore Oil Corporation (CNOOC) was also added to the entity list, apart from Xiaomi.