Today, January 15, the Trump administration has added Xiaomi and eight other Chinese firms to a list of alleged Communist Chinese military companies operating directly or indirectly in the U.S.
Now, this is different from the U.S. Commerce Department’s Entity List, in which entities like Huawei are banned from working with companies based in the United States. However, American investors will be required to divest their holdings of Xiaomi by November 11, 2021, pursuant to an executive order signed by outgoing President Donald Trump in November 2020.
American investors will be required to divest their holdings of Xiaomi by November 11, 2021
So while the world’s third-largest smartphone vendor still has access to software and hardware developed in the U.S., it will be cut off from liquid capital. Its stock price could be affected as well.
Xiaomi, which celebrated its 10th anniversary in 2020, went public in Hong Kong in July 2018 below its initial-public offering price. Its shares rallied last year when rival Huawei was prevented from even working with semiconductor suppliers, making Xiaomi HK’s best-performing stock. One of its American investors is Qualcomm Ventures.
In case an outright ban happens sometime in the future, Xiaomi has a reassurance. The manufacturer’s head of global product marketing, Abi Go, earlier told Spain-based technology publication Xataka that “we have a plan B. Among other things, we are investing heavily in various semiconductor manufacturers in China,” adding that “our business strategy should not be conditioned by decisions made by politicians.”
Update, 7:30 p.m.: Xiaomi just published a clarification statement online. Read the release below.
Via XDA Developers
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