This decision was part of the federal government’s mission to stop the presence of Chinese companies in the country, over issues of a possible alleged national security problem.
Xiaomi blacklisted company
Compared to other companies like Huawei, Xiaomi is the least expected Chinese company to be involved on the said banning.
After all, Xiaomi was once considered as China’s Apple and has been successful in the US for many years now.
This company also brings electric scooters, earphones and smart rice cookers.
According to Kevin Chen, a Hong Kong-based analyst at China Merchants Securities Co., the news of the blacklisted Xiaomi was “really surprising.”
Why Xiaomi gets banned
Though the involvement of Xiaomi company in the blacklisted game was surprising for experts, the reason behind it wasn’t.
Since last year, Trump administration has been purging Chinese companies—whether famous or not—to stop operations in the US.
As speculated by the government, Chinese apps and companies “raise capital by selling securities to United States investors that trade on public exchanges both here and abroad, lobbying United States index providers and funds to include these securities in market offerings, and engaging in other acts to ensure access to United States capital,” the executive order reads. “In that way, the [People’s Republic of China] exploits United States investors to finance the development and modernization of its military.”
There were several companies and apps that were already banned from being used by Americans.
In this year alone, more than 60 Chinese companies were already blacklisted in the country. In 2020, famous China affiliates like Huawei smartphone maker and video-sharing app, TikTok were set to be banned in the US.
But, due to companies’ complaints in court, these decisions were not yet finalized until today.
As explained by the federal government, a lot of apps and companies from China pose their software as a friendly tool, but with a hidden purpose in mind: get the data of each Americans.
“This action stems from China’s military-civil fusion doctrine and evidence of activities between SMIC and entities of concern in the Chinese military industrial complex,” the Commerce Department said in a statement.
Other affected Chinese entities include those “that enable human rights abuses, entities that supported the militarization and unlawful maritime claims in the South China Sea, entities that acquired U.S.-origin items in support of the People’s Liberation Army’s programs, and entities and persons that engaged in the theft of U.S. trade secrets,” according to the U.S. government statement.
What happens once companies are blacklisted
As the term suggests, blacklisted means that the companies will no longer have access to the US market, same with Americans can no longer invest on these companies.
If this happens, the stock market may decrease instantly and it will be a huge repair for the next president