The Trump administration may be in the process of packing its things into boxes but that hasn’t stopped the US government from placing Xiaomi – the world’s third-largest phone company – on a blacklist that could spell trouble for the Chinese mobile giant in the coming months.
The US’ Department of Defence has, along with eight other Chinese corporations “operating directly or indirectly in the United States”, marked Xiaomi as a ‘Communist Chinese military company’.
Xiaomi’s name joins a growing blacklist, first released to US congress by the DoD back in June 2020, targeting companies that it suspects have links to the People’s Liberation Army of China.
The list itself has already been expanded upon numerous times since its initial release and although predominantly filled with Chinese energy and construction companies, also features telecoms entities, including notable mobile compatriot, Huawei.
Huawei’s operations across the telecommunications and networking spaces at a national and international level seem to better justify its place on this list, however, Xiaomi’s business is primarily focussed on consumer mobile, IoT and lifestyle products and services, making its appearance and addition to this list particular comparatively unusual.
Indeed, rather than building out a national telecoms network, Xiaomi’s attentions are more focussed on competing with the likes of Apple and Samsung in the consumer mobile space; as demomstarted by its newly-launched flagship Android phone – the Mi 11 – and forthcoming next-gen devices, like the unknown foldable concept recently spotted on the subway (pictured).
Spyshots of Xiaomi’s folding phone concept | Source: Weibo (since removed)
This blacklist isn’t to be confused with the US government’s entity list, which prevents US investors from investing in a marked company but it does require that existing investments from US backers need to be withdrawn by 11 November – assuming the Biden administration doesn’t overturn the order once in power.
In a formal statement issued by the company, Xiaomi states that it is “operating in compliance with the relevant laws and regulations of jurisdictions where it conducts its businesses,” as well as refuting its designation by the DoD as a ‘Communist Chinese military company’; stating that it is not “owned, controlled or affiliated with the Chinese military.”
At present, the US administraition and the DoD haven’t provided any public evidence to accompany their decision to add Xiaomi to this blacklist, so the allegation of links to the PLA currently remain baseless in the public eye.