The Trump administration has added smartphone maker Xiaomi to a blacklist of alleged Chinese military companies. Report informs referring to CNBC.
The Chinese firm's Hong Kong-listed shares were down 10.6% at the open on Friday on that news.
According to Counterpoint Research, Beijing-based Xiaomi was the world's third-largest smartphone maker in the third quarter of 2020.
The move means that Xiaomi is now subject to a November executive order restricting American investors from buying shares or related securities of any companies designated by the Department of Defense to be a Chinese military company.
Trump's initial executive order was subsequently expanded to force investors to divest or sell out, of affected holdings, by November 11 this year.
The company is listed in Hong Kong and not in the U.S.
"The Department is determined to highlight and counter the People's Republic of China's (PRC) Military-Civil Fusion development strategy, which supports the modernization goals of the People's Liberation Army (PLA) by ensuring its access to advanced technologies and expertise acquired and developed by even those PRC companies, universities, and research programs that appear to be civilian entities," the DOD said in a statement.
Xiaomi is one of nine entities designated as "Communist Chinese military companies." Comac, a Chinese aircraft manufacturer, is also on the list.