According to a report by The Verge, the US Department of Defense (DOD) has categorized Xiaomi as a ‘Communist Chinese Military Company’.
Washington DC| After Huawei, another Chinese smartphone Xiaomi has received a major setback. In the US, the Trump Administration has added 9 Chinese companies to the blacklist of alleged Chinese military companies. Among the Chinese companies that have been added to the blacklist, there are 9 companies including the world’s third-largest smartphone company Xiaomi and Plane Maker Commercial Aircraft Corporation of China (Comac), according to a report by Reuters.
Companies Categorized as ‘Communist Chinese Military Company’
The Trump Administration has only six days left in office and being blacklisted is a major setback for the companies. According to a report by The Verge, the US Department of Defense (DOD) has categorized Xiaomi as a ‘Communist Chinese Military Company’. Following this recent move by Trump Administration, American investors will no longer be able to invest in Chinese companies linked to it. This also means American investors will have to sell their stake in companies blacklisted by 11 November 2021.
How will it affect Xiaomi?
Despite the blacklist, Xiaomi’s business may not be impacted in the same way as Huawei. This blacklisting prevents American investors from investing in Chinese companies. However, this will not affect Xiaomi’s supply chain. Also, this ban will not prevent American companies from selling equipment and materials to the company. For foreign companies, blacklisting by the US Commerce Department is a big loss since it leads to ban on supplying materials, equipment or technology to them by the US firms. At the moment, Xiaomi is under blacklisting of the US Defense Department and it hasn’t been added to the blacklist by the US Commerce Department.
The world’s third-largest smartphone maker overtook Apple
However, Xiaomi has not yet commented about this blacklisting. According to data from Gartner, the Chinese mobile maker became the third-largest smartphone maker in the world, outpacing Apple in the third quarter of 2020. Xiaomi’s market share has grown rapidly, as Huawei has suffered a major setback after being blacklisted by the US. Huawei has stopped receiving essential services from Google.
Recently, the Trump administration has signed an executive order to ban 8 Chinese apps. These apps are linked to Chinese companies. It is alleged that these Chinese apps can make the personal information of users accessible to the Chinese government.