GUANGZHOU, China – The Trump administration has blacklisted smartphone maker Xiaomi on suspected Chinese military companies.
The Chinese company’s Hong Kong-listed shares fell 10.6% on the news when it opened on Friday.
Beijing-based Xiaomi was the third largest smartphone maker in the world in the third quarter of 2020, according to Counterpoint Research.
The move means Xiaomi is now subject to a November regulation preventing American investors from buying stocks or related securities of companies named by the Department of Defense as a Chinese military company.
Trump’s original executive order was subsequently expanded to force investors to sell or sell affected holdings by November 11 of this year.
Xiaomi wasn’t immediately available for comment when contacted by CNBC.
The company is listed in Hong Kong, not the United States
“The Ministry is determined to highlight and combat the People’s Republic of China (PRC) military-civil fusion development strategy, which supports the modernization goals of the People’s Liberation Army (PLA) by ensuring access to advanced technology and expertise acquired and developed by Even those companies, universities and research programs in the PRC that appear to be civil entities, “the DOD said in a statement.
Xiaomi is one of nine entities called “Communist Chinese Military Enterprises”. Comac, a Chinese aircraft manufacturer, is also on the list.
The DOD published its first list of companies in June 2020. Companies like Chinese tech giant Huawei and semiconductor maker SMIC are also on the list.