In 1999, a very special law was enacted in the United States requiring the drafting of one list of foreign companies that were allegedly owned or controlled by the Chinese military. The Pentagon, which only began complying with that law this year, has blacklisted well 35 company including oil giants and Chinese microchip manufacturers like SMIC. With the tightening of China-US relations and with the bad situation in which Trump and his administration is pouring in this period, here is the blond ex-head of state has decided to also include Xiaomi in this list.
UPDATE AT THE END OF ARTICLE 15/01/2021
Xiaomi, like many other companies, has also been included in the black list of companies presumably controlled by the Chinese army
News that has the absurd, let's be honest. A company like Xiaomi which has in its interest only to produce electronic devices she cannot be involved in such affairs. It is not our job to argue; it is not our job to enter into political speeches; it is not our duty to defend a company in this position, but without a doubt the situation is getting out of hand with Trump and his administration.
As revealed by Reuters, the president who is about to leave the White House would have included Lei Jun's brand within the so-called military blacklist. Expanding this list is part of the president's program for consolidate his hard legacy with China in the waning days of his presidency. Already in November, Trump tried to give greater substance to the law by signing an executive order that prohibits US investments in blacklisted companies. The move just made will force US companies to divest their holdings from blacklisted companies by 11 November 2021. At the moment there are no statements from the tech giant Chinese but we are sure that in the coming days a spokesperson will present the company's position.
But in concrete, what does this mean?
If the situation were to be the same as in Huawei was found long ago, Xiaomi then may not sell multiple devices of any kind internationally. However, we recall what the brand itself reported some time ago:
"In any case, if something happens in the future, we have a plan B. Among other things, we are investing heavily in various semiconductor manufacturers in China, but we believe that our business strategy should not be conditioned by decisions made by politicians. Until now, we have opted to integrate the best components into our products and will continue to do so in the future"
However, nothing is lost. It is very likely that the administration Biden it will remove this sort of block and nothing will happen to the company.
15 / 01 / 2021 UPDATE
The company has timely responded, informing that:
The company noted that the US Department of Defense issued a press release on January 14, 2021 (US time), stating that the company has been included in the relevant list in accordance with Section 1237 of the law. on the national defense authorization for fiscal 1999. The company has always adhered to legal and compliant operations and complied with the laws and regulations in force in the workplace. Its services and products are used for civil or commercial purposes. The company confirms that it is not owned, controlled or related to the Chinese military, nor is it defined in the US NDAA Chinese Military Company. The company will take appropriate measures to protect the interests of the company and shareholders. The company is examining the possible consequences of the accident to fully understand its impact on the Group. The company will release further announcements in due course. Potential shareholders and investors are advised to exercise caution when trading company securities "
Unfortunately we are aware that after yesterday's announcement the Xiaomi's shares plummeted by almost 5%. On social media, the company reassures that the situation is not at all the same as that of Huawei.