HONG KONG -- The U.S. government has blacklisted Chinese smartphone maker Xiaomi Corp. and China's third-largest national oil firm for alleged military links, heaping pressure on Beijing in President Donald Trump's last week in office.
The Department of Defense additional nine firms to its list of Chinese firms with military links, such as Xiaomi and state-owned plane manufacturer Commercial Aircraft Corp. of China (Comac).
U.S. investors might have to divest their stakes in Chinese companies on the military record by November this year, based on an executive order signed by Trump last November.
Xiaomi Corp. overtook Apple Inc. as the world's No. 3 smartphone manufacturer by sales in the next quarter of 2020, based on data by Gartner. Xiaomi's market share has increased as Huawei's sales have endured after it had been blacklisted by the U.S. and its smartphones were cut off from essential services from Google.
Separately, the Commerce Department put China National Offshore Oil Corp. (CNOOC) about the entity list, an economic recourse which forbids U.S. firms from exporting or transferring technology with the firms named unless consent has been obtained from the U.S. government. The move comes after roughly 60 Chinese companies were added to the listing in December, including drone manufacturer DJI and semiconductor company SMIC.
CNOOC has been engaged in offshore drilling in the disputed waters South China Sea, in which Beijing has overlapping territorial claims along with other nations such as Vietnam, the Philippines, Brunei, Taiwan, and Malaysia.
"China's reckless and belligerent activities in the South China Sea and its competitive push to get sensitive intellectual property and technology for its militarization attempts are a threat to U.S. national safety and the safety of the international community," U.S. Commerce Secretary Wilbur Ross said in a statement.
"CNOOC acts as a bully for the People's Liberation Army to intimidate China's neighbors, and the Chinese military continues to benefit from government civil-military fusion policies for malign purposes," Ross stated.
A CNOOC spokesperson said in a statement that it will"continue to monitor the improvement," admitting that the company was put on the thing list.
Chinese state-owned company Skyrizon was also inserted to the financial blacklist, for its push to"profit and indigenize overseas military technologies," Ross said.
Beijing Skyrizon Aviation, founded by tycoon Wang Jing, drew U.S. criticism for an attempt to take over Ukraine's army aircraft engine manufacturer Motor Sich at 2017. The concern was that innovative aerospace technology could wind up being used for military purposes.
China's Ministry of Foreign Affairs spokesperson Zhao Lijian criticized the movement as controlling Chinese companies, and stated the Trump administration was"generalizing the idea of national safety and abusing state authority for no apparent reason."
"China will take necessary measures to resolutely safeguard the legitimate rights and interests of Chinese businesses, and resolutely support Chinese businesses in protecting their own rights and interests with respect to the law," Zhao said at a daily briefing Friday.
He explained the U.S. actions lacked principles of marketplace competition and international trade and economic rules, and undermined the confidence of overseas businesses investing in the U.S., all which would eventually hurt the interests of U.S. enterprises and investors.