Xiaomi shares dive 11% in Hong Kong after US blacklisting

The company was one of 11 firms targeted by US officials who said they posed a threat to national security. PHOTO: REUTERS

HONG KONG (AFP) - Shares in Chinese technology giant Xiaomi sank more than 11 per cent in Hong Kong trading on Friday (Jan 15) after the US put it on a blacklist banning Americans from investing in it, as the Trump administration ramps up its battle with Beijing.

The company, one of the world's biggest smartphone makers and considered China's answer to Apple, was one of 11 firms targeted by US officials who said they posed a threat to national security.

The move is the latest salvo by the White House against Beijing as Donald Trump's presidency comes to an end, and follows similar actions against other tech firms including Huawei and chip giant SMIC.

But Xiaomi is one of the biggest companies to be blacklisted. The firm overtook Apple in smartphone sales in the third quarter, according to the International Data Corporation.

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.

In a statement to The Straits Times on Friday, Xiaomi said the company has been in compliance with law and operating according to the relevant laws and regulations of jurisdictions where it conducts its businesses.

"The company reiterates that it provides products and services for civilian and commercial use. The company confirms that it is not owned, controlled or affiliated with the Chinese military, and is not a 'Communist Chinese Military Company' defined under the NDAA," Xiaomi said, referring to the US National Defence Authorisation Act.

"The company will take appropriate course of actions to protect the interests of the company and its shareholders."

Xiaomi added that it is reviewing the potential consequences of the move by the US to develop a fuller understanding of its impact on the company. It will make further announcements as and when appropriate, it said.

Mr 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.

A separate list from the Commerce Department also banned Americans from supplying companies including state energy giant CNOOC and deep-water explorer Skyrison, which develops military equipment.

Join ST's Telegram channel here and get the latest breaking news delivered to you.