US government has blacklisted Chinese smartphone maker Xiaomi along with 8 other companies with alleged links with the Chinese military. After this, US investors can no longer invest in the blacklisted companies.
This information has been revealed by a report of Reuters. The report says that US investors are now barred from purchasing shares and securities of these companies and will have to divest their existing holdings in them by Nov. 11, 2021.
The Trump administration has designated Xiaomi as a “Communist Chinese military company”. In November last year, Trump signed an executive order banning American securities and investment companies making investments that fund “Communist Chinese military companies”.
Along with Xioami, there are other big firms such as plane manufacturer Commercial Aircraft Corp. of China (Comac) also added to the list. The ban will affect Xiaomi severely as it will impact its business with Qualcomm Ventures which is one of the companies investing in Xiaomi.
“China’s reckless and belligerent actions in the South China Sea and its aggressive push to acquire sensitive intellectual property and technology for its militarization efforts are a threat to US national security and the security of the international community,” US Commerce Secretary Wilbur Ross said in a statement on January 14.
As per CNBC report, the Xiaomi’s shares had dropped 10.6 per cent after the development. Xiaomi who surpassed Apple as the world’s No. 3 smartphone maker in Q3 2020, was yet to react to the US move. If the company issues a statement on the matter, we will keep you updated.