Xiaomi’s stock price slumped more than 11% on Friday when the Hong Kong Stock Exchange opened, after the Chinese phone maker was blacklisted by the United States on a company blacklist.
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Xiaomi is one of eleven Chinese companies affected by the Americans’ ban on investing in it. This is the latest move by the administration of outgoing President Donald Trump against Beijing.
Similar sanctions have been imposed on Chinese smartphone maker Huawei and chip giant SMIC.
Xiaomi, which in Q3 2020 was the world’s third-largest smartphone maker, is one of the largest Chinese companies to be on this blacklist.
Founded in 2010, Xiaomi has seen tremendous growth in recent years by offering high-end devices, but at affordable prices, and initially selling them directly online.
Almost unknown abroad five years ago, the brand was at the time regularly mocked for its products strongly inspired by the Apple iPhone.
According to the International Data Corporation, the company overtook Apple in terms of smartphone sales in the third quarter of 2020.
In a statement, the US Department of Defense said it was “determined to highlight and counter the PRC’s civil-military fusion development strategy” that would allow it to access critical data in terms of technology and security.
In November, Donald Trump’s administration issued an executive order banning Americans from investing in Chinese companies believed to be supplying or supporting the Chinese military to prevent them from accessing American technology.
China immediately denounced the measure, accusing the United States of “harassment” and promising to “take the necessary measures” to defend the rights of Chinese companies.
Another list, compiled by the Commerce Department, also prohibits Chinese companies, including the Chinese national oil group CNOOC and Skyrizon, which specializes in the airline sector, from being eligible for stock market indices on Wall Street.