Xiaomi among firms blacklisted by US

HONG KONG: The US government has blacklisted Chinese smartphone maker Xiaomi Corp and China’s third-largest national oil company for alleged military links, heaping pressure on Beijing in President Donald Trumps last week in office.

The Department of Defence added nine companies to its list of Chinese firms with military links, including Xiaomi and state-owned plane manufacturer Commercial Aircraft Corp. of China (Comac).

US investors will have to divest their stakes in Chinese companies on the military list by November this year, according to an executive order signed by Trump last November.

Xiaomi did not immediately respond to a request for comment.

Xiaomi Corp overtook Apple Inc as the world’s No 3 smartphone maker by sales in the third quarter of 2020, according to data by Gartner.

Xiaomi’s market share has grown as Huawei’s sales have suffered after it was blacklisted by the U.S. and its smartphones were cut off from essential services from Google.

Separately, the Commerce Department put China National Offshore Oil Corp (CNOOC) on the entity list, an economic blacklist that forbids US firms from exporting or transferring technology with the companies named unless permission has been obtained from the US government.

The move comes after about 60 Chinese companies were added to the list in December, including drone maker DJI and semiconductor firm SMIC.

CNOOC has been involved in offshore drilling in the disputed waters South China Sea, where Beijing has overlapping territorial claims with other countries including Vietnam, the Philippines, Brunei, Taiwan, and Malaysia.

It’s good to be able to turn to friends for support Xiaomi lost some $10 billion in market value following its addition to the US blacklist of companies deemed to have military ties. Others already tagged, including China Mobile, have recently seen local buying ease the pain of US selling. Xiaomi, a market darling, can expect something similar.

The unexpected addition to the Pentagon’s list will force Americans to divest their holdings in Xiaomi, whose market capitalisation tumbled to $96 bn on Friday morning. Confusion has swirled around the process: companies have been frequently added, while the US Treasury Department is still expanding its guidance over how exactly to comply and the original order itself has been amended.