Xiaomi takes US state to court over investment ban

Xiaomi is suing the US state for placing it on a blacklist of ‘Chinese military companies’. As a result of this placement, American parties can no longer invest in Xiaomi and existing investments must be withdrawn.

Xiaomi says it will suffer “serious and irreparable damage if the designation remains in effect and the restrictions come into effect.” Under the orders of the Trump administration, investors must withdraw their investments by November this year. It calls the blockade unconstitutional and wants both the defense and finance ministries to appear in court.

The largest US investors in Xiaomi at the moment are BlackRock Inc., the Vanguard Group Inc. and State Street Corp., Bloomberg writes. However, it is not known what amounts those companies have put into Xiaomi and thus how much they should withdraw.

The Trump administration placed the ban on January 15, just days before the then president’s resignation. The order classifies Xiaomi as a Chinese military company, or at least one with close ties to the Chinese military. The Defense Ministry says the list’s purpose is to prevent China’s military forces from developing a development strategy that would give them access to cutting-edge technologies and expertise sourced from military companies, universities and “research programs that appear to be civilian entities.” . Xiaomi denies being a Chinese military company.