The U.S. government officially imposes a blacklist on Chinese smartphone manufacturer Xiaomi Corp. along with China’s third-largest national oil company alleging connections with the military. The decision put a lot of pressure on Beijing during Donal Trump’s last days in office.
The blacklist imposed by the Department of Defense on nine Chinese companies with military links also includes Xiaomi and state-owned plane manufacturer Commercial Aircraft Corp. of China or Comac.
Following the ban, investors in the U.S. would have to divest their stakes with these Chinese companies on the list by the end of November this year as per the statements of an executive order signed by Trump in November.
Xiaomi, however, has still not commented.
By the third quarter of 2020, Xiaomi Corp. overtook Apple Inc as to the third biggest smartphone maker in the world by sales as per data collected by Gartner. The smartphone makers grew in terms of market share after Huawei’s sales declined after getting blacklisted by the U. S. Huawei was also cut off from all essential services from Google making its sales graph drop substantially. During this time, Xiaomi rose to prominence and its sales graph increased exponentially in the market.
The list also has China National Offshore Oil Corp or CNOOC as per the Commerce Department which forbids U.S. firms from exporting or transferring technology which these companies unless the government grants special permission. This move came into action following the banning of 60 companies of Chinese origin in December including semiconductor firm SMIC and drone maker DJI.
CNOOC was involved in offshore drilling in the disputed South China Sea waters where Beijing already hold overlapping claims regarding territories with countries such as Vietnam, the Philippines, Taiwan, Brunei, and Malaysia.
U.S. Commerce Secretary Wilbur Ross said that China has been playing recklessly along the South China Sea. Its efforts of acquiring confidential intellectual property and technology for military purposes will impose a threat to the national American security along with that of the international community.
Ross also added that CNOOC is like a bully to the People’s Liberation Army that directly intimates China’s neighboring counties. The Chinese military benefits from government civil-military policies still for destructive purposes.
CNOOC has also refrained from commenting.
The economic blacklist also includes Chinese state-owned company Skyrizon that is acquiring and indigenizing foreign military technologies.
Beijing Skyrizon Aviation, founded by tycoon Wang Jing also invited a lot of criticism by the American government for its attempt to take over Motor Sich, Ukraine’s military aircraft engine maker back in 2017. Their concern was that the technology, being a super-advanced aerospace technology would be used for malign military purposes in the end. What is to be seen now is whether the new implementations or bands will bring about any change in the integrated economy. With so many issues going on around us on the basis of social, political, and economic ground, that the future seems volatile and uncertain.
