US adds Xiaomi to its list of ‘Communist Chinese military companies’

The Pentagon on Thursday added Xiaomi Corporation and eight other firms to the list of companies with alleged ties to the Chinese military in line with an executive order signed by President Donald Trump

The outgoing Trump administration continues to pressure China in its final days, adding Chinese smartphone giant Xiaomi, whose handsets account for almost a quarter of India’s market, to a list of “Communist Chinese military companies”.

Xiaomi handsets account for almost a quarter of India’s market. (File photo)

The Pentagon on Thursday added Xiaomi Corporation – which recently surpassed Apple to become the world’s third largest smartphone maker – and eight other firms to the list of companies with alleged ties to the Chinese military in line with an executive order signed by President Donald Trump.

The other firms included aviation major Commercial Aircraft Corporation of China, China National Aviation Holding Co Ltd and Global Tone Communication Technology Co Ltd.

“The Department [of Defense] is determined to highlight and counter the People’s Republic of China’s (PRC) Military-Civil Fusion development strategy, which supports the modernisation goals of the People’s Liberation Army (PLA) by ensuring its access to advanced technologies and expertise acquired and developed by even those PRC companies, universities, and research programs that appear to be civilian entities,” the Pentagon said in a brief statement.

Since the Pentagon first released the names of Chinese firms with alleged ties to the military in June 2020, a total of 44 companies have been added to the list.

The executive order signed by Trump bars fresh American investments in the companies on the list, and existing US investors will have to divest their stakes in these firms by November this year.

The US had earlier blacklisted Huawei and pressured partners, including India, to keep the Chinese telecommunications giant out of their plans to develop 5G networks. Prior to the military standoff along the Line of Actual Control, the US focus on Huawei had become an irritant in India-China relations, and the Chinese side had pushed India to act independently on the issue of including Huawei in trials.

The listing of the companies by the Pentagon was part of a flurry of activity by the Trump administration in its dying days to keep up the pressure on China and was in line with President Trump’s personal push against China, especially in trade issues.

On Thursday, the US commerce department also added state-run China National Offshore Oil Corporation (CNOOC) to its “entity list”, effectively limiting the export of American technology to the company. The department said CNOOC had helped China intimidate its neighbours in the troubled South China Sea.

“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.

Some experts have suggested that the Trump administration’s actions are aimed at forcing the incoming Biden administration to keep up the pressure on China. While most observers believe president-elect Joe Biden will opt for a less confrontational approach, his decision to appoint veteran diplomat Kurt Campbell to the new post of “Indo-Pacific coordinator” has been seen as a signal that the focus will remain on China and its assertive actions across the region.

The growth in Xiaomi’s global market share has been facilitated by a decline in Huawei’s sales after the giant was blacklisted by the Trump administration and its smartphones were cut off from essential services provided by Google. Sales in India’s booming handsets market has accounted for a substantial chunk of Xiaomi’s success.