Xiaomi, which is considered to be the world’s number three phone manufacturer has been categorized by the Department of Defense of America as a “Chinese Communist Military Company.” As per the “Chinese Communist Military Company policy,” a company under this list can be banned from being invested in by US investors.
Why Xiaomi is Getting Blacklisted by the US?
It is really odd for a company like Xiaomi to be included in such a list because if we check all the other Chinese companies which are already present on this list, we will find that all the other companies are related to specializing in shipbuilding, aviation, aerospace, telecommunications, construction, chemicals, and other forms of infrastructure which can propose a threat to the US defense. But, on the other hand, Xiaomi is a brand that mainly manufactures various smartphones and various other simple smart gadgets for day-to-day use.
If we look into the list we will also find Huawei, the world’s number two phone manufacturer to be also on the list. Though the name of Huawei being on the list can be understandable as the company builds large-scale telecommunications equipment which as per US lawmakers, can be a concern for the US defence.
There is still a possibility that the “Chinese Communist Military Company policy” may get revoked by the new oncoming Biden administration as the policy was original brought to power by the Trump administration which is going to end in a few days. But if the policy isn’t revoked then US investors would be forced to divest in Xiaomi by November 11th, 2021.
Experts believe that this can be a big blow to Xiaomi in the US market if the policy gets implemented.
On the other hand, the US has included other various companies like drone maker company DJI on the US Commerce Department’s “Entity List,” which is a totally separate list compared to the “Chinese Communist Military Company.” As per the US Commerce Department’s “Entity List,” no US companies are allowed to export any kind of technology to the companies mentioned in the list. Some Chinese companies like Huawei and SMIC are on both lists.
The US Commerce Department is now in the process to block six entire countries which are termed as “foreign adversaries,” from providing communications equipment to the US. The six countries labeled as “foreign adversaries” are the People’s Republic of China (China), the Russian Federation (Russia), the Islamic Republic of Iran (Iran), the Democratic People’s Republic of Korea (North Korea), the Republic of Cuba (Cuba), and Venezuelan politician Nicolás Maduro (Maduro Regime).