The US government has blacklisted Xiaomi and China’s third-largest national oil company for alleged military links, adding pressure on Beijing in President Donald Trump’s last week in office.
The Department of Defense added nine companies to its list of Chinese companies with military links, including Xiaomi and state-owned plane manufacturer Commercial Aircraft of China (Comac).
According to an executive order signed by Trump in November, US investors will have to divest their stakes in Chinese companies on the military list by November this year.
Xiaomi said in a statement that it is “not owned, controlled, or affiliated with the Chinese military.” It also said that the company will take an “appropriate course of action” to protect the interests of its stakeholders.
According to data by Gartner, Xiaomi overtook Apple as the world’s No. 3 smartphone maker by sales in the third quarter of 2020.
Xiaomi’s market share has grown as Huawei’s sales have suffered after it was blacklisted by the US and its smartphones were cut off from essential services from Google.
The Commerce Department put China National Offshore Oil Corp. (CNOOC) on the entity list which is an economic blacklist that restricts US firms from exporting or transferring technology with the companies named unless permission has been obtained from the US government.
The decision comes after about 60 Chinese companies were added to the list in December, including drone maker DJI and semiconductor firm SMIC.
CNOOC has been involved in offshore drilling in the disputed waters of the South China Sea, where Beijing has overlapping territorial claims with other countries including Vietnam, the Philippines, Brunei, Taiwan, and Malaysia.
US Commerce Secretary Wilbur Ross said in a statement that “China’s reckless and belligerent actions in the South China Sea and its aggressive push to acquire sensitive intellectual property and technology for its militarisation efforts are a threat to US national security and the security of the international community,”
Ross also added that “CNOOC acts as a bully for the People’s Liberation Army to intimidate China’s neighbors, and the Chinese military continues to benefit from government civil-military fusion policies for malign purposes.”
She said that Chinese state-owned company Skyrizon was also added to the economic blacklist, for its push to “acquire and indigenize foreign military technologies.”
Beijing Skyrizon Aviation, founded by tycoon Wang Jing, drew US criticism for an attempt to take over Ukraine’s military aircraft engine maker Motor Sich in 2017.