American investors can no longer invest in Xiaomi.
What you need to know
- The Trump administration has placed an investment ban on Xiaomi.
- It's being alleged that Xiaomi is a "Communist Chinese military company".
- American investors have until November 11th to divest their holdings with the company.
Not a week before President-elect Joe Biden is inaugurated into office, the Trump administration is taking its last moments to flex its proverbial muscles. Reuters reports that Xiaomi, along with nine other Chinese companies, has been placed on an investment blacklist by the Trump administration. These companies are alleged to be part of the "Communist Chinese military" and American investors are being told to refrain from investing with them.
It's unclear where these allegations stem from, but it's concerning nonetheless. The U.S. government is making American investors divest their holdings in these companies, and have until November 11th to do so. As XDA-Developers notes, Qualcomm Ventures is one of the companies investing in Xiaomi. And while it's not exactly known how this will affect the company, it does put Xiaomi in the spotlight.
The move comes after years of back and forth between the U.S. and Huawei, which have been locked in a trade tussle for quite some time. The U.S. Commerce Department put Huawei on its entity list and have barred it from using any goods and services from U.S. based companies. This put the company in a tight spot and even though Qualcomm was later given permission to resume selling 4G technology to the company, Huawei's business continues to suffer. Drone-manufacturer, DJI, which makes many of the best camera drones was also recently targeted and placed on the same entity list.
Fortunately, Xiaomi is not being placed on the Commerce Department's Entity List, and its blacklisting only affects its investors, so as it stands, suppliers should be able to continue working with the company. But the move does mean that Xiaomi could possibly see its business further targeted in the future, depending on how Biden's new administration decided to handle things.
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