US blacklists Xiaomi, major Chinese firms over military links

Hong Kong - The US government has blacklisted Chinese smartphone maker Xiaomi Corp. and China’s third-largest national oil company CNOOC for alleged military

The US government has blacklisted Chinese smartphone maker Xiaomi Corp. and China’s third-largest national oil company for alleged military links, heaping pressure on Beijing in President Donald Trump’s last week in office.

The Department of Defence added nine companies to its list of Chinese companies with military links, including Xiaomi and state-owned plane manufacturer Commercial Aircraft Corp. of China (Comac).

US investors will have to divest their stakes in Chinese companies on the military list by November this year, according to an executive order signed by Trump in November.

Xiaomi did not immediately respond to a request for comment.

Xiaomi Corp. overtook Apple Inc. as the world’s No. 3 smartphone maker by sales in the third quarter of 2020, according to data by Gartner. 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.

Separately, the 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. The move 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 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 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,” US Commerce Secretary Wilbur Ross said in a statement.