The US Department of defence announced that it had blacklisted nine companies for allegedly joining the Chinese military. Notable names are mobile manufacturer Xiaomi and aircraft manufacturer Commercial Aircraft Corporation of China (COMAC). As a result, an executive law issued by US President Donald Trump in November last year barred US investors from buying shares in these companies until they were removed from the list. No US company will be able to invest in those Chinese companies.
Xiaomi’s share price fell 10.6% in the global market after the news. According to a recent Gartner survey, Xiaomi emerged as the world’s third-largest smartphone maker, overtaking Apple in the October-December quarter of the 2020-21 fiscal year. But experts say the new US embargo will make it harder for them to hold on to the badge for long. The two companies were recently joined by China National Offshore Oil Corporation (CNOOC) and Deepwater Explorer Skyrim.
Experts believe that the US-China trade war may resume in the coming days due to multiple sanctions. U.S. Commerce Secretary Wilbur Ross said the Beijing administration is recklessly and unilaterally creating an atmosphere of war in the South China Sea. At the same time, the sensitive intellectual property rights of so many organizations for the US military and the way in which the government is seizing sophisticated technology are becoming a matter of concern not only for US national security but also for the international community. This step was taken to keep them away.
Earlier, Chinese mobile phone maker Huawei and chip maker SMIC were similarly banned for allegedly interfering directly with the Chinese government and secretly monitoring customer information.
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