Chinese smartphone maker Xiaomi said Wednesday a US district court has ordered the Defense Department to lift a ban on American investment in the company.
Why it matters: Xiaomi has evidently shaken off a geopolitical burden that have weighed down its shares since earlier this year. It is unlikely that the Biden administration will appeal against the decision.
- Xiaomi was placed on a list of “Communist Chinese military companies (CCMC)” by the outgoing Trump administration on Jan. 15, a week before it left office.
- A similar move against China’s three major telecom companies led to their delisting from US stock markets in May.
Details: The US District Court for the District of Columbia issued a ruling ordering the US Department of Defense to remove Xiaomi from the CCMC list, said the smartphone maker in a filing (in Chinese) to the Hong Kong exchange on Wednesday.
- The order “officially revoked all restrictions on the purchase or holding of the company’s securities by US investors,” said Xiaomi.
- The company is “an open, transparent, publicly traded, independently operated and managed corporation,” it said.
- The Biden Administration has previously said it won’t challenge a ruling by a federal judge that temporarily blocked enforcement of the blacklisting.
Context: An executive order signed by US President Donald Trump in November bans American investment in companies that it deemed owned, controlled, or affiliated with China’s military.
- In February, Xiaomi filed a lawsuit against the US government over the decision to add it to the CCMC list. Xiaomi said that it believes its inclusion was “factually incorrect and has deprived the company of legal due process.”
- In March, a federal judge temporarily blocked enforcement of the ban on the company, calling the decision to blacklist Xiaomi “deeply flawed.” Xiaomi is not state-owned.
- China’s three state-owned telecom operators, China Mobile, China Unicom, and China Telecom, said on May 8 that they would be delisted by the New York Stock Exchange on May 18. The three firms were added to the CCMC list by the Trump administration last year.