The U.S. Defense Department on Thursday banned Americans from investing in the Chinese technology firm Xiaomi, the world’s third-largest smartphone maker, adding it to a list of companies that the department says support China’s military.
The announcement means that U.S. investors will no longer be able to buy Xiaomi stock after 60 days and will have a year to sell existing holdings. It was issued in accordance with an executive order issued by President Trump and sent the company’s Hong Kong-listed shares tumbling almost 14 percent on Friday after its stocks had more than doubled in the past 12 months, according to the Wall Street Journal.
Xiaomi pushed back against the addition to the U.S. investment blacklist on Friday, saying it provides products and services for civilian and commercial use and is not owned, controlled or affiliated with the Chinese military. The company said it would take appropriate action to protect itself and its shareholders.
In a filing to the stock exchange, the company said it wasn’t a “Communist Chinese military company” under the U.S. definition.
Unlike Huawei, another Chinese smartphone and technology giant, Xiaomi was not added to the Commerce Department’s “entity list” which prohibits companies from exporting U.S.-created technology to firms without a license.
Xiaomi therefore will be able to continue using Qualcomm chips and the Android operating system from Alphabet, according to the Journal.
The investment ban previously included 35 companies before the U.S. announced it had added Xiaomi and eight other companies to the list on Thursday, including Shanghai-listed Advanced Micro-Fabrication Equipment and state-owned passenger-jet maker Commercial Aircraft Corp. of China, or Comac.