Xiaomi and other Chinese firms hit with U.S. restrictions
Donald Trump administration is imposing even more damage on Chinese businesses – including smartphone manufacturer Xiaomi – with some days to go before Joe Biden takes office. On Thursday, the United States Defense Department added nine Chinese companies, including Xiaomi, to a list of firms the agency claims owned or controlled by the military of China. Companies on the list are hit with harsh restrictions, including a restriction on American investment.
The addition of Xiaomi to the list is worrying for the company. Whereas, it recently beat Apple to become the 3rd largest smartphone maker globally, according to market intelligence company IDC. Moreover, the latest list of Pentagon included the Commercial Aircraft Corporation of China, a key state-owned Chinese plane manufacturer that the nation wants to build up as an alternative to Airbus and Boeing.
Statement from the Defense Department
The Defense Department of the United States stated that it planned to highlight and deal with the relationship between the Chinese military and companies that seem to appear as civilian entities but which support the military with advanced expertise and technology. On Friday, Beijing criticized the new restrictions as an abuse of power by the American government.
The United States industry has a long history of civil-military relationships, according to a spokesperson for the Chinese Ministry of Foreign Affairs, Zhao Lijian. He accused the Trump administration of bullying and double standards. The United States Commerce Department also put China National Offshore Oil Corporation, the largest offshore oil producer of China, on another list that efficiently cuts it off from United States supplies and technology. The company previously added to the list of the Defense Department.
Wilbur Ross, the Commerce Secretary stated that CNOOC acts like a bully for the People’s Liberation Army to threaten the neighbors of China while referring to the military of the country. Furthermore, his agency claimed that Chinese oil producer harassed and threatened CNOOC in the South China Sea by other countries, like Vietnam. Xiaomi denied the claims that the Chinese military-owned or controlled it in a stock exchange filing.
Xiaomi denied the claims of the Trump administration
The company said in the statement that it confirms that China’s military did not own or controlled it. It further adds that it is not a Communist Military Company that defines under the National Defense Authorization Act. Moreover, Xiaomi states that it will take a suitable course of action to defend the interests of the firm and its stockholders.
CNN Business contacted Comac, CNOOC, and other firms that added to the United States government lists on Thursday for comments, but they didn’t respond until now. These moves are the latest in a flock of actions the Trump management took against Beijing in some weeks leading up to the inauguration of President-elect Joe Biden. It could hurt the relationships between the United States and China for the incoming government.
Xiaomi and other Chinese firms hit with U.S. restrictions Source: Web
Senior market strategist for the Asia Pacific at Oanda, Jeffrey Halley, wrote in a research note on Friday, the coming administration will not likely as aggressive as Trump’s administration but may not also be prepared to unwind the policies of the Trump administration as many might hope. The Hang Seng Tech Index (it tracks the performance of tech stocks of China), dropped almost 1.4%. On Friday, Xiaomi was the worst performer on the index.
