US declares Xiaomi a “Communist Chinese military company,” bans investments

Enlarge / The Xiaomi Mi 11. (credit: Xiaomi)

The latest shot in the US Government's war on leading Chinese smartphone vendors is directed at Xiaomi, which today has landed on the US government's list of "Communist Chinese Military Companies" via a new executive order. The declaration makes it illegal for US citizens to own Xiaomi stock.

The US and China have been trading blows for a year and a half now over Huawei, which was added to the "entity list" by the US Department of Commerce. While on the entity list, American companies can't collaborate with Huawei or export products to it. It becomes illegal for Huawei to import any product of "US-Origin." US Origin doesn't just mean products made in the US by US companies; there's also a "viral" component to the law, where any product made internationally with some US-origin components also counts as a US-origin product.

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View more storiesWhile Huawei got an all-encompassing ban, it doesn't look like Xiaomi is in the same boat right now. Huawei landed on the Department of Commerce's entity list, while Xiaomi is now on the Department of Defense's list of Communist Chinese Military Companies" (Huawei is also on this list). The DOD designation seems to only ban US investment in Xiaomi, and any American stakeholders need to divest their holdings by November 11, 2021. (Xiaomi is a public company and had an IPO back in 2018.) The suffocating supply chain restrictions that apply to Huawei don't (yet?) apply to Xiaomi.

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