HONG KONG – Shares in Xiaomi collapsed today after the United States blacklisted the smartphone giant and a host of other Chinese firms, as the President Donald Trump’s administration aims to cement its trade war legacy against Beijing.
The flurry of last-minute blacklistings is the coda to four years of aggressive diplomatic and trade policies towards rival China under Trump.
With just six days to go before Trump leaves office, US officials made a series of announcements targeting Chinese firms, including state oil giant CNOOC, Xiaomi and embattled social media favourite TikTok.
Xiaomi, which overtook Apple last year to become the world’s third-largest smartphone manufacturer, was one of nine new firms classified by the Pentagon as “Communist Chinese military companies”.
The action means US investors will be unable to purchase Xiaomi securities, and will ultimately have to divest down the line unless the order is overturned by the incoming presidency of Joe Biden.
Xiaomi is one of the biggest companies to be blacklisted so far, and its shares plunged 11% in Hong Kong today after the announcement. US chip giant Qualcomm is a major investor.
In a statement, the Defence Department said it is “determined to highlight and counter the People’s Republic of China’s military-civil fusion development strategy” that allowed it to access key technology and security data.
Similar actions have been made by the US against other tech firms, including Huawei and chip giant SMIC, hobbling their ability to import key technology and compete internationally. – AFP, January 15, 2021
