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Xiaomi, 8 other Chinese firms blacklisted by US for alleged military links

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In what could probably be the last assault against China by the Donald Trump-led US administration, nine Chinese companies, including smartphone maker Xiaomi, have been blacklisted in the country for their alleged military links. The move is likely to increase the pressure on China.

The US government’s Department of Defense added nine companies to the list of Chinese companies with military links. Apart from Xiaomi, the list also includes government-owned planemaker Commercial Aircraft Corporation of China.

Following the blacklisting of these companies, all US investors having stakes in these companies will have to divest their stakes by November 2021. This is as per an executive order signed by Donald Trump in November last year.

Xiaomi pips Apple in Q3 of 2020

As per Gartner data, 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.

CNOOC added to economic blacklist

In a separate development, the US government’s Commerce Department put China National Offshore Oil Corp. (CNOOC) on the entity list, an economic blacklist that forbids US firms from exporting or transferring technology with the companies named unless permission has been obtained from the US government.

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The move comes after about 60 Chinese companies were added to the list in December, including drone maker DJI and semiconductor firm SMIC.

CNOOC’s role in South China Sea

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.

“China’s reckless and belligerent actions in 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,” US Commerce Secretary Wilbur Ross said in a statement.

“CNOOC acts like a bully for the Peoples Liberation Army to intimidate China’s neighbors, and the Chinese military continues to benefit from government civil-military fusion policies for malign purposes,” Ross said.

Skyrizon added to economic blacklist

Chinese state-owned company Skyrizon was also added to the economic blacklist, for its push to “acquire and indigenous foreign military technologies,” Ross said.

Beijing Skyrizon Aviation, founded by tycoon Wang Jing, drew US criticism for an attempt to take over Ukraines military aircraft engine maker Motor Sich in 2017. The concern was that advanced aerospace technology would end up being used for military purposes.

 

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