USA adds Xiaomi to list of alleged Chinese military companies
- by Joann Nelson
- in Sci-tech
- — Jan 16, 2021
"Both companies threaten USA national security, CNOOC by helping China intimidate neighbours in the South China Sea, and Skyrizon for its capability to develop, produce, or maintain military items, such as military aircraft engines".
The department also added Chinese aviation firm Skyrizon to a Military-End-User (MEU) List which restricts its access to U.S. exports.
China National Aviation Holding Co.
None of the companies involved in Thursday's sanctions immediately commented on the decision.
The blacklist and divestment are in accordance with an executive order signed by US President Donald Trump a couple months ago. The White House also blacklisted China's No. 3 oil company, China National Offshore Oil Corp., on Thursday.
Biden has pledged to work with allies to develop a more coherent strategy against China, though it's not clear whether there'll be any immediate shifts in policy. 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. But it is a different set of sanctions that saw Huawei cut off from American technology - including Google services - past year.
Xiaomi has responded to the entity ban that was issued by the United States government against it earlier today. Tech giants China Telecom, China Mobile and China Unicom were removed from trading as of Monday.
For now, the biggest impact seems to be on Xiaomi's share price, which fell 11 percent on the news.
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Global Tone Communication Technology Co. Spreads on Xiaomi's dollar bonds widened as much as 40 basis points Friday morning, according to credit traders.
S&P Dow Jones Indices said the company will strip CNOOC from its stocks list "on or before February 1".
Beijing claims most of the South China Sea. It first announced to delist the three Chinese telcos, then decided not to after consultation with regulators, but eventually reversed its reversal and said it would delist them, after all, upon further evaluation.
The sanctions include visa restrictions on some Chinese individuals, specifically executives from state-owned companies, as well as officials in the Chinese Communist Party and the Chinese Navy.
The Department of Defense in the United States has blacklisted 9 Chinese firms, for alleged military links.
The S&P Dow Jones said late Wednesday that it would delist the CNOOC "on or before February 1", which is part of a wider campaign by the Trump administration to isolate Chinese firms from USA investors.
Subsidiaries of Cnooc have stakes in two USA shale oil and gas projects, according to Daiwa Capital Markets Hong Kong Ltd.
In its response, the Chinese embassy referred to Foreign Ministry comments on January 7 accusing Washington of "pinning political and ideological labels on economic and trade issues and exploiting its state power to crack down on foreign companies, under the pretext of national security".
