Over in Europe Xiaomi is a well-known brand, selling smartphones with quality hardware at reasonable prices, and making a pretty good fist of it. In the US, Xiaomi doesn’t have much of a presence, a strategy that has probably come about after seeing the troubles experienced by Huawei and ZTE. Now though, the Trump administration has seen fit to add Xiaomi to its blacklist of Chinese companies that have links to the Chinese military.
Whether it’s having a contract to produce goods for the Chinese military or providing support, Xiaomi, along with 8 other companies including the planemaker Comac, are now blacklisted. The result of which means that US companies are barred from investing in the blacklisted companies and must divest their holdings in such companies by November 11, 2021, according to a document seen by Reuters.
Naturally, Xiaomi denies that it has a connection to the Chinese military and issued the statement above on its Twitter account. Unlike Huawei’s ban, the blacklisting of Xiaomi doesn’t stop US companies from doing business with it, just the prohibition of investing in the brand with investors needing to selling their holdings by November 11 this year. This will hit Xiaomi’s liquid capital, though, which will cause some issues in how the brand brings products to market as well as R&D.
With Biden taking office in just a few days, it’s going to be interesting to see what the new administration’s stance on China will be in the weeks and months ahead.
Source: Reuters
