Xiaomi Blacklisted In USA For This Reason; 8 More Chinese Firms Blacklisted (What It Means?)

In a shock to popular smartphone brand Xiaomi, the US Govt has blacklisted them.

Besides, 8 other Chinese firms too have been blacklisted by the US Govt in a sudden, unexpected move.

What does this mean?

US Blacklists Xiaomi For This Reason

The Department of Defense in the US has blacklisted 9 Chinese firms, for alleged military links. This list include Xiaomi, the smartphone brand which sold most number of smartphones in India last year.

Chinese Govt owned and controlled airlines manufacturer: Commercial Aircraft of China (Comac) have also been blacklisted by the US Govt.

Xiaomi is right now world’s 3rd biggest smartphone maker behind Apple and Samsung.

What Does Blacklisting Mean?

Since the US Govt’s Defense Department and Commerce Department have blacklisted 9 Chinese companies, investors will be mandated to sell their investments in these firms, by November. 

Besides, no American will be allowed to invest in these companies, or have any formal relations. This is a huge setback for Xiaomi’s expansion plans in the US, and as soon as the news came in, their share prices dropped by 11%.

Since this is ex-President Trump’s last week in the White House, this move surprised the analysts and international trade experts.

Military Tension Main Reason?

We are not yet clear as to how a smartphone and electronic appliance maker can have any military link with Chinese Govt, but the blacklisting is clearly due to the military tension between US and China.

Earlier last month, when US Govt blacklisted 60 Chinese companies due to the same reason, one of the companies was China National Offshore Oil Corp.

US Commerce Secretary Wilbur Ross had said, “China’s reckless and belligerent actions in the South China Sea and its aggressive push to acquire sensitive intellectual property and technology for its militarisation efforts are a threat to US national security and the security of the international community,” 

For blacklisted companies, transfer of technology is also not allowed.

We will keep you updated, as more details come in.