Trump names Xiaomi as ‘Chinese Communist military’ company

In the final days of his presidency, Donald Trump took on another Chinese tech giant. On Wednesday, the Trump administration officially added Xiaomi, along with eight other companies, to its list of “Communist Chinese military companies.”

Companies designated as Communist Chinese Military Enterprises by the Defense Ministry are blacklisted to receive investments from US citizens or organizations. If not revoked, the designation would mean that existing investors in the United States would have to divest from Xiaomi.

Xiaomi is one of the largest phone makers in the world, only Samsung and Huawei are selling more phones, according to an IDC study. With a global market share of 13.1%, thanks to its popularity in China, Latin America and Europe, Xiaomi sells even more phones than Apple. (Apple sells fewer phones than its competitors, but makes a lot more profit per phone sold.)

Xiaomi did not immediately respond to a request for comment.

The designation of Xiaomi is different from that the Trump administration gave Huawei, China’s largest technology company. Huawei is on the US Department of Commerce’s “entity list”, which prohibits US companies from doing business with it. This is why recent Huawei phones have worked without access to Google’s Play Store or US chipmakers.

Huawei was put on the entity list, alongside ZTE, as much of its business is in telecommunications equipment, such as setting up 4G and 5G networks. This part of Huawei’s operations – not phone manufacturing, for which it is best known in the West – has been identified by the Trump administration as a risk to national security. Xiaomi only sells consumer electronics, which is probably why it was put on the less severe blacklist.

The Ministry of Defense established the list of companies associated or controlled by the People’s Liberation Army in 1999.

“The key to the development of the PRC’s military, intelligence and security apparatus is the country’s large, seemingly private economy,” reads a recent executive order from Trump. “Through the national strategy of military-civilian fusion, the PRC is increasing the size of the country’s military-industrial complex by forcing Chinese civilian companies to support its military and intelligence activities.

Trump’s criticism of Chinese companies has been the hallmark of his presidency. Beyond Huawei and ZTE, Trump has also tried to ban the social media platform TikTok. Last week, he signed a decree which bans transactions with eight apps made in China, including WeChat Pay and AliPay.