The administration of President Trump has added Xiaomi to a list of the US Department of Defense. This list includes ‘Communist Chinese military companies’. The listing could mean companies withdrawing their investments in Xiaomi.
In a short press release, the US Department of Defense announces its inclusion on this list. This marks Xiaomi as a Chinese military company, or at least a company with close ties to the Chinese military. The ministry said the list’s purpose is to prevent China’s military forces from developing a development strategy that would give them access to advanced technologies and expertise from military companies, universities and “research programs that appear to be civilian entities.”
There are now a total of nine different companies on the list. In addition to Xiaomi, Commercial Aircraft Corporation of China, better known as Comac, has also been added. Furthermore, there are mainly industrial companies from, for example, the aviation sector, the chemical sector and the chip industry. Xiaomi is a somewhat striking name on the list in that regard, because there are no other companies that make consumer electronics.
The inclusion on this list does not seem to have immediate consequences in itself, but due to an earlier decree from President Trump, that could be the case. In November last year, Trump signed a decree expressing his concern about the development of China’s military forces and the national strategy in which the military and the civilian merge. This would be a threat to the US. The decree prohibits America from investing in listed companies and requires American companies to divest any interests or investments in those companies.
It remains to be seen how much impact this listing will have on Xiaomi. President Trump’s administration will soon be replaced by Biden’s, which could mean the listing could be reversed. In any case, this list concerns something different from the Entity List. This is a blacklist from the US Department of Commerce, which means that US companies are only allowed to do business with companies that are on the list with specific permission. Huawei, for example, is a prominent name on this list, and Chinese drone manufacturer DJI and processor manufacturer SMIC were also added last month.