Xiaomi shares down 10.9% after US blacklist in clash against China
Shares of Chinese smartphone maker, Xiaomi Corp., plunged 10.9 percent in the early hours of Friday (Nigerian time) after the United States blacklisted the firm in what can be described as a flurry of actions against China.
The embargo on the smartphone-making company follows a December decision by the Donald Trump administration to boycott more than 60 other Chinese companies. Xiaomi alongside eight other top firms were added to the Defense Department’s list of Chinese military companies.
Since assuming office in 2016, Trump has repeatedly used the hammer on Chinese companies it perceives as having military ties, and strategic to industrial growth, as the White House pressures Beijing over alleged intellectual property and cyber theft and forced technology transfers, believed to be threats to national security.
Xiaomi, which was co-founded by billionaire entrepreneur Lei Jun about 10 years ago, has since expanded well beyond China’s borders, particularly into Europe and India, becoming one of the country’s more recognisable brands.
For the first time in 10 years, Xiaomi emerged as the world’s third-largest smartphone maker by shipments in the third quarter of 2020, overtaking American tech giant Apple, according to the International Data Corporation. It also joined Hong Kong’s Hang Seng Index in September after grabbing market share from Huawei Technologies Co. as US sanctions on Huawei deepened.
The White House also blacklisted Cnooc, China’s third-biggest oil company, over its drilling in the South China Sea. Other firms include state-owned planemaker Commercial Aircraft Corp. of China Ltd., or Comac, which is central to China’s goal of creating a narrow-body plane that can compete with Boeing Co. and Airbus SE.
It is very unlikely that US President-elect Joe Biden will continue with the power tussle philosophy of Trump, who has barely five days to stay in office.