SHARES in Xiaomi collapsed today after the United States blacklisted the smartphone giant and a host of other Chinese firms as the Trump administration aims to cement its trade war legacy against Beijing.

The flurry of last-minute blacklisting is the coda to four years of aggressive diplomatic and trade policies towards rival China under President Donald Trump.

With just six days to go before Trump leaves office, US officials made a series of announcements targeting Chinese firms, including state oil giant CNOOC, Xiaomi and embattled social media favourite TikTok.

Xiaomi – which overtook Apple last year to become the world’s third-largest smartphone manufacturer – was one of nine new firms classified by the Pentagon as “Communist Chinese military companies”.

The action means US investors will be unable to purchase Xiaomi securities and will ultimately have to divest down the line unless the order is overturned by the incoming presidency of Joe Biden.

Xiaomi is one of the biggest companies to be blacklisted so far and its shares plunged 11% in Hong Kong today after the announcement. US chip giant Qualcomm is a major investor.

In a statement, the Department of Defence said it was “determined to highlight and counter the People’s Republic of China’s military-civil fusion development strategy” that allowed it to access key technology and security data.

Similar actions have been made by the US against other tech firms, including Huawei and chip giant SMIC, hobbling their ability to import key technology and compete internationally.

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 yesterday 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. – AFP, January 15, 2021.