Guangzhou, China – The Trump administration has included smartphone maker Xiaomi in a blacklist of alleged Chinese military companies.
On that news, the Hong Kong-listed shares of the Chinese firm were down 10.6% in the open on Friday.
According to Counterpoint Research, Beijing-based Xiaomi was the world’s third-largest smartphone maker in the third quarter of 2020.
The move means that Xiaomi is now subject to a November executive order prohibiting US investors from purchasing Chinese military company shares or related securities of any company designated by the Department of Defense.
Trump’s initial executive order was later extended until November 11 of this year to force investors to divest or sell the affected holdings.
Xiaomi was not immediately available for comment when contacted by CNBC.
The company is listed in Hong Kong and not in the US
“The Department is determined to highlight and counter the People’s Republic of China (PRC) military-civilian fusion development strategy, ensuring its access to acquire and develop advanced technologies and expertise of the People’s Liberation Army (PLA) The modernization supports the goals. Even those PRC companies, universities and research programs appear to have civic institutions, “the DoD said in a statement.
Xiaomi is one of nine entities designated as “Communist Chinese Military Companies”. Chinese aircraft manufacturer Comac is also on the list.
DOD released its initial list of companies in June 2020. Firms like Chinese technology giant Huawei and semiconductor manufacturer SMIC are also on this list.