Xiaomi and US government bury the hatchet, settle investment ban | GeekComparison

Xiaomi and US government bury the hatchet, settle investment ban

Xiaomi is no longer on the government’s block list, according to a new court noted by Reuters. When it went out on January 14, the Trump administration’s Defense Department declared Xiaomi a “Communist Chinese military company,” but now with Joe Biden at the helm, Xiaomi and the US government are burying the hatchet. According to Reuters, “The filing stated that the two sides would agree to resolve their pending lawsuit without further dispute.”

The DOD says the list of “Communist Chinese military companies” is intended to “highlight and counter the military-civil fusion development strategy of the People’s Republic of China (PRC)”, which the US government says will bring technology to the Chinese military conducts through “corporations, universities, and research programs that resemble civilian entities.” This list is not the total export ban that Huawei has faced – that is the US Department of Commerce “entity list”. The list of military companies only prohibits US investment in the company.

Xiaomi called the ban “unconstitutional” and said it was “factually incorrect and deprived the company of a legal due process”. The company added that the investment restrictions would cause “immediate and irreparable harm to Xiaomi”. The first of the restrictions would have come into effect on March 15, 2021 (a ban on buying new shares from Xiaomi), but that was temporarily blocked by a federal judge, who called the government’s ban process “deeply flawed”. Ultimately, the ban would have forced US investors to divest Xiaomi’s stock, which would have been a major problem for the company. Xiaomi had an IPO in 2018 and today three of the top 10 shareholders are US citizens.

The Biden administration is backtracking on one of Trump’s anti-China decisions, but that doesn’t mean the US administration is loving China now. Biden has tightened restrictions on Huawei’s suppliers, further disrupting some of the few trade deals it was able to negotiate.

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