Xiaomi reels as US ramps up blacklist
Pentagon targets Chinese firms in last days of Trump
Shares in Xiaomi collapsed yesterday after the US blacklisted the smartphone giant and a host of other Chinese firms as the Trump administration aims to cement its trade war legacy against Beijing.
Beijing hit back at the latest sanctions, accusing the US of “abusing state power” to crack down on Chinese companies “for no reason”.
The flurry of last-minute blacklistings is the coda to four years of aggressive diplomatic and trade policies towards rival China under Donald Trump.
With just six days to go before the president leaves office, US officials made a series of announcements targeting Chinese firms including state oil giant CNOOC, Xiaomi and embattled social media favourite TikTok.
Xiaomi — which overtook Apple last year to become the world’s third-largest smartphone manufacturer — was one of nine firms classified by the Pentagon as “Communist Chinese military companies”.
The Pentagon’s action means US investors will be unable to purchase Xiaomi securities and will ultimately have to divest down the line unless the order is overturned.
Xiaomi is one of the biggest companies to be blacklisted so far and its shares plunged more than 10% in Hong Kong by the close of trading yesterday after the announcement. US chip giant Qualcomm is a major investor.
The smartphone maker denied having links to China’s military and said in a statement it was “reviewing the potential consequences” of the new order.
The US Department of Defense said it was “determined to highlight and counter the People’s Republic of China’s military-civil fusion development strategy” that allowed it to access key technology and security data.
Similar actions have been made by the US against other tech firms including Huawei and chip giant SMIC.
“The Trump administration has broadened the concept of national security, abused state power and repeatedly cracked down on Chinese companies for no reason,” said Chinese foreign ministry spokesman Zhao Lijian yesterday.
“China is firmly opposed to that.”