Xiaomi formally removed from US blacklist

26 May 2021

Image: © mehaniq41/Stock.adobe.com

A court vacated the US Department of Defense order that had listed the smartphone maker as being linked to the Chinese military.

Chinese smartphone maker Xiaomi has been formally removed from a US government blacklist following a court ruling.

Yesterday (25 May), a court in the District of Columbia vacated an order from the US Department of Defense that labelled the company as having ties to the Chinese government, or what it calls a Communist Chinese military company or CCMC.

The designation was handed down in the last weeks of the Trump administration and was challenged by Xiaomi in court, calling the order “arbitrary and capricious” and accusing the US of providing no due process or right of reply for the company.

The CCMC designation could have been dire for Xiaomi as it would greatly restrict the company’s American operations, prevent backers from investing in the company and force existing American shareholders to offload their stock.

Lei Jun, chair of Xiaomi, said in a statement that that the smartphone maker remains an “independently operated and managed corporation”.

“[Xiaomi] will continue to provide reliable consumer electronics products and services to users, and to relentlessly build amazing products with honest prices to let everyone in the world enjoy a better life through innovative technology,” he said.

Xiaomi’s shares, which are traded in Hong Kong, were up after the news. The company is due to report its latest quarterly earnings later today.

The court ruling against the Department of Defense marks a significant chapter in US relations with China when it comes to tech. While the US’s stance toward China has not become friendly, the attitude toward Chinese tech companies under the Biden administration is a little less rancorous.

The long-running saga over TikTok and the ownership of its US business is no longer an issue, but questions remain over 5G equipment maker Huawei, which remains subject to sanctions that are having an impact on its bottom line.

Jonathan Keane is a freelance business and technology journalist based in Dublin