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The US includes Xiaomi on its blacklist for its alleged connections with the Chinese military

2021-01-15T22:22:43.322Z

The mobile phone manufacturer has denied the accusation and assures that it has no affiliation with the army of its country



The facade of a Xiaomi store in Beijing, China, this Friday.GREG BAKER / AFP

The Trump Administration's trade and technology war against China promises to last until the end of the Republican term, which ends at noon on January 20.

The latest order was launched by the Defense Department on Thursday after including nine companies from the Asian giant on its black list, the so-called group of "Companies of the Chinese Communist Army."

Among them is the tech giant Xiaomi, the largest mobile phone seller in Spain.

The measure means that companies are now subject to severe restrictions, including a ban on US investors from buying shares.

The news has already resulted in a stock market crash for the manufacturer, whose shares fell more than 10% on Friday on the Hong Kong Stock Exchange.

The Defense Department has argued that this veto is part of its action to "highlight and counteract" the strategy that China is carrying out to give access to technologies and other advances that develop what "apparently are companies, universities and civil research programs ”.

Under the terms of an executive order signed by outgoing President Donald Trump, in 60 days more American investors will not be able to buy Xiaomi shares and have one year to sell their current holdings.

Xiaomi's shares have more than doubled in the past 12 months and the company recently surpassed Apple as the world's third-largest smartphone maker, according to Gartner.

Through a statement released on Twitter, they have come out to deny their alleged links with the Chinese Army.

The spokesman for the Chinese Foreign Ministry, Zhao Lijian, declared in Beijing on Friday that China firmly opposes the new sanctions.

"This action goes against the trend of the times and goes against its self-proclaimed market competition and the rules of international economic trade," said Lijan, who accused the Trump administration of "double standards" and "intimidation."

The Pentagon's list also includes the China Commercial Aircraft Corporation (Comac), a state-owned aircraft maker that the country aims to offer as an alternative to giants Boeing and Airbus.

Before Thursday, the Pentagon had already added 35 Chinese companies to its blacklist, including chipmaker SMIC and Huawei, the mobile phone maker that has an intense push with Washington over the development of 5G technology.

In addition to blocking the purchase of these securities on the stock exchange for US citizens, American investors are obliged to dispose of their shares before November 11, 2021. The list that aggravates the tensions between the US and Beijing began to be drawn up in the middle of the year In the past, it already includes 44 Chinese companies, mostly manufacturers of microchips and technological devices, aeronautical and nuclear engineering companies and telecommunications conglomerates.

Xiaomi was quick to clarify that the company "is not owned, controlled or affiliated with the Chinese military, and it is not a 'Chinese Communist Military Company' defined under the [National Defense Authorization Law]."

In a statement, the Asian company remarked that "it has operated in accordance with the relevant laws and regulations of the jurisdictions in which it does business."

In addition to clarifying that it offers products and services for civil and commercial use, Xiaomi warned that "it will take the appropriate course of actions to protect the interests of the company and its shareholders."

He is currently “reviewing the possible consequences of this to have a more complete understanding of its impact on the group,” and says he will “make more announcements when appropriate”.

Source: elparis

All business articles on 2021-01-15

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