The US Department of Defense (DOD) has added nine more companies to an investment blacklist, including the Chinese smartphone maker Xiaomi.
This US blacklist which Xiaomi and eight other firms have been added to contains names of companies with alleged ties to the Chinese military.
However, the smartphone maker has responded to these allegation with an official statement by denying any such connections to the Chinese military.
“The company has been in compliance with law and operating in compliance with the relevant laws and regulations of the jurisdictions where it conducts its business. The company reiterates that it provides products and services for civilian and commercial use.” said Xiaomi in a clarification statement regarding the matter.
“The company confirms that it is not owned, controlled or affliated with the Chinese military, and is not a “Communist Chinese Military Company” defined under the NDAA. The company will take appropriate course of actions to protest the interests of the company and its stakeholders” it added in the statement.
As for what it means for the Xiaomi is not immediately clear, as this is not an outright ban restricting US firms from dealing with the smartphone maker.
This blacklist only prevents US investors from investing in Xiaomi, which means that the company’s supply chain won’t be affected, unlike Huawei which was added to the US Commerce Department Entity List, barring all US based businesses from dealing with the company.
However, this move by the US will cause Xiaomi’s stock to drop as American investors will start pulling out of the company. Those who currently hold stocks in the smartphone maker will be required to sell them by 11th November 2021.
Only time will tell how a move like this is likely to affect Xiaomi in the long term. This may get worse for the company if the US decides to move the company to the Entity List.
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