GUANGZHOU, China — The Trump administration has added smartphone maker Xiaomi to a blacklist of alleged Chinese military companies.
Hong Kong-listed shares of the Chinese firm were down 10.6% at the open on Friday on that news.
Beijing-based Xiaomi was the world’s third-largest smartphone maker in the third quarter of 2020, according to Counterpoint Research.
The move means that Xiaomi is now subject to a November executive order restricting American investors from buying shares or related securities of any companies designated by the Department of Defense to be a Chinese military company.
Trump’s initial executive order was subsequently expanded to force investors to divest, or sell out, of affected holdings, by Nov. 11 this year.
Xiaomi was not immediately available for comment when contacted by CNBC.
The company is listed in Hong Kong and not in the U.S.
“The Department is determined to highlight and counter the People’s Republic of China’s (PRC) Military-Civil Fusion development strategy, which supports the modernization goals of the People’s Liberation Army (PLA) by ensuring its access to advanced technologies and expertise acquired and developed by even those PRC companies, universities, and research programs that appear to be civilian entities,” the DOD said in a statement.
Xiaomi is one of nine entities designated as “Communist Chinese military companies.” Comac, a Chinese aircraft manufacturer, is also on the list.
The DOD released its initial list of companies in June 2020. Firms such as Chinese technology giant Huawei and semiconductor manufacturer SMIC, are also on the list.