Pentagon Adds Xiaomi to U.S. Investment Blacklist

By Quentin Webb

Xiaomi Corp. and eight other businesses have been added to a list of companies that the U.S. Department of Defense says aid China's military and security services, meaning U.S. investors will soon be barred from buying shares in the Chinese smartphone-maker.

Xiaomi's inclusion on the Pentagon's list of "Communist Chinese military companies" means that it will be covered by an executive order issued in November by President Trump that blocks new U.S. investment in blacklisted companies or in funds that hold them.

Earlier this week, The Wall Street Journal reported that the U.S. government was expected to let Americans continue to invest in Chinese technology giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd., after weighing their potential addition to the blacklist, but was set to add nine other companies.

Xiaomi's American depositary receipts, which trade in the over-the-counter markets, fell 7.5% on Thursday. The company's Hong Kong-listed shares have surged 167% in a year, giving Xiaomi a market capitalization of about $107 billion, according to FactSet.

The investment ban already covered 35 groups, and the Treasury Department has said it will add company subsidiaries to the list. As well as Xiaomi, Thursday's additions included Shanghai-listed Advanced Micro-Fabrication Equipment Inc.

Write to Quentin Webb at [e-mail]

(END) Dow Jones Newswires

January 14, 2021 20:11 ET (01:11 GMT)

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