GUANGZHOU, China – The Trump administration has added smartphone maker Xiaomi to the blacklist of alleged Chinese military companies.
Shares of the Hong Kong-listed Chinese company tumbled 10.6% at the open on Friday due to the news.
Beijing-based Xiaomi was the world’s third-largest smartphone maker in the third quarter of 2020, according to Counterpoint Research.
This move means Xiaomi is now Subject to an executive order in November Preventing US investors from purchasing shares or related securities of any company that the Defense Department identifies as a Chinese military company.
Trump’s initial executive order was later expanded to compel investors to withdraw or sell their investments, by November 11 this year.
Xiaomi was not immediately available for comment when contacted by CNBC.
The company is listed in Hong Kong, not in the United States
“ The ministry is determined to highlight the strategy for developing the military and civilian integration of the People’s Republic of China (People’s Republic of China), which supports the modernization goals of the People’s Liberation Army (PLA) by ensuring its access to advanced technologies and experiences acquired and developed by even those companies, universities and research programs in The People’s Republic of China appears to be a civilian entity, “the Ministry of Defense said in a statement.
Xiaomi is one of nine entities designated as “Communist Chinese Military Enterprises”. Comac, the Chinese aircraft manufacturer, is also on the list.
The Ministry of Defense released its initial list of companies in June 2020. Companies such as Chinese tech giant Huawei and semiconductor manufacturer SMIC are also included in the list.