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Thursday, September 21, 2023

China’s Xiaomi soars as US judge lifts it from blacklist

US judge removed Xiaomi from the blacklist and suspended the investment ban after the firm appealed against the blacklisting.

Shares in Chinese smartphone maker Xiaomi surged more than 10 percent in Hong Kong on Monday after a US judge removed it from a blacklist that barred American companies from investing in it.

The firm’s stock price has been hammered since mid-January when Donald Trump, in his last days in office, included it in a group the White House considered a threat to US national security.

The move classified Xiaomi, which is among the biggest smartphone makers in the world, as one of nine “Communist Chinese military companies” that also included state oil giant CNOOC, and popular social media app TikTok.

Read more: Smartphone giant Xiaomi collapses as US blacklists

But US District Judge Rudolph Contreras ruled Friday that the Department of Defense and the Treasury “have not made the case that the national security interests at stake here are compelling”.

He removed Xiaomi from the blacklist and suspended the investment ban after the firm appealed against the blacklisting.

The news sent shares in the firm surging 12 percent in Hong Kong morning trade Monday, having lost more than 40 percent since Trump’s order.

However, while Xiaomi was removed, US regulators listed Huawei and ZTE among Chinese telecom equipment makers considered a threat to national security, signalling that a hoped-for softening of relations is not on the cards.

Reckless and belligerent

Trump issued an executive order in November banning Americans from investing in Chinese companies deemed to be supplying or supporting the country’s military and security apparatus, earning a sharp rebuke from Beijing.

Earlier this month the New York Stock Exchange said it was delisting three state-owned Chinese telecoms giants to comply with the order.

The Commerce Department also released a separate banned entity list on Thursday targeting companies such as CNOOC and deep-water explorer Skyrison, which develops military equipment.

That makes it extremely difficult for US firms to export products or technology to those companies without a hard-to-obtain licence.

Read more: Xiaomi launches electric bike that folds to the size of an A3 paper

Commerce Secretary Wilbur Ross said CNOOC had been listed because of “reckless and belligerent actions in the South China Sea and its aggressive push to acquire sensitive intellectual property and technology for its militarization efforts”.

“CNOOC acts a bully for the People’s Liberation Army to intimidate China’s neighbors, and the Chinese military continues to benefit from government civil-military fusion policies for malign purposes,” Ross said.

AFP with additional input by GVS News Desk