Xiaomi denies military activity after being blacklisted by US

Americans are banned from investing in a list of companies released by the US, and current investors must divest holdings by November 11.
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Xiaomi Corporation released a statement on January 15 addressing allegations made by the US Department of Defense (DoD) that the Chinese electronics company is involved in military activity. 

On January 14, the DoD released a list of “Communist Chinese military companies,” just days before President Joe Biden’s inauguration.

“The company confirms that it is not owned, controlled, or affiliated with the Chinese military, and is not a ‘Communist Chinese Military Company’ defined under the NDAA,” the statement read, reiterating that Xiaomi provides products for civilian and commercial use only.

The electronics company, founded in 2010, specializes in smartphones and household appliances. However, other firms on the list are more industrial, belonging to sectors including aviation, chemicals, construction, and telecommunications.  

Following former President Donald Trump’s executive order, Xiaomi and the eight other firms appearing on the latest list are now blacklisted from American investments, The Verge reported

The company added that it will take “appropriate course of actions” to protect the corporate and stakeholder interests. A Xiaomi spokesperson also told The Verge that the company is evaluating the DoD list’s implications before taking action.

The order was made under the National Defense Authorization Act (NDAA) for Fiscal Year 1999, Section 1237. It would force US companies and investors to divest their holdings by November 11.

Xiaomi is now in the company of fellow smartphone giant Huawei. However, the latter is also on the US Commercial Department’s Entity List, according to XDA Developers. The list forbids corporations from conducting business with American companies, which are also banned from exporting technology to blacklisted companies. 

As it stands, Xiaomi appears only on the DoD list. XDA Developer noted that while the company’s stock price took a hit — at the time of publication, worth HK$30.40, -0.49%, according to MarketWatch — Xiaomi’s supply chain is unaffected by the policy.

Wiki Production Code: A0487

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