Xiaomi’s ban by the US though shocking is not surprising

When America woke up and decided to ban Huawei many months ago, I wrote this article saying “Huawei ban a wake-up call to all Android Makers“. I said, if nothing was done to try and fight that ban, especially the way it had been approached, nothing would stop America from coming for other Android makers. And here we are, in 2021, with the outgoing Trump administration now adding Xiaomi to an investment black list.

To be clear, there are 9 companies that have been black-listed today by the U.S. Department of Defense. And the reason for this black-listing is that the United States claims they are part of the “Communist Chinese Military Companies”. The US is therefore asking all its citizens and companies to cease any investments they may have with these companies. And they have until November 2021 to do so.

The black-list Xiaomi has been added to is DIFFERENT from the Entity List by the U.S. Commerce Department that banned Huawei and DJi from doing any businesses with US companies. Essentially, Xiaomi can still continue doing its businesses as it normally has been. They still have access to everything, one can argue, apart from the investments they’ve been enjoying from US companies and individuals. That includes the huge investments Xiaomi has received from US companies like Qualcomm.

For now, the biggest impact on Xiaomi is that their stock prices may fall.

However, this could just be the beginning of another round of bullying by America against China. You will remember, Huawei was also placed on this list before the outright ban barring them from trading with any US company. One could say, Xiaomi may be headed there. And what would be there to stop that from happening? No tech company stood up for Huawei in a public or mighty way, I doubt any would stand up for Xiaomi should things go south.

Recently, Xiaomi beat Apple to become the third biggest smartphone maker in the world with a market share of 13.1%. Huawei still came in second despite everything, with Samsung at number one. With Apple falling to number four (something that will surely change in 2021), many people see the new restrictions against Xiaomi as America’s way of crippling the company’s growth. An attempt to stifle them.

Right now, I don’t believe there’s anything that can be done to stop America’s bullying on Chinese companies. We expected a reiteration from China after the Huawei ban, but that never really matured. Perhaps China thinks after the Trump administration things may go back to normal, personally I don’t. I think the new American administration, plus its legislators have never opposed the fight with China, and they may even double down on the restrictions.

Xiaomi could slowly, especially with the expected conversations around them right now, join America’s entity list forcing them to stop any business with American companies including Google. That would force them to go the Huawei way, and I can’t say that’s something I am looking forward to. Unfortunately, Google will keep quiet like they did with Huawei, only later arguing against competition, rather than for freedom.

I still stand with my last paragraph on the article about Huawei’s ban being a wake up call. I said:

…this should serve as a wake-up call to the whole tech ecosystem. Maybe the idea of open source software has now completely failed because of trade wars and politics. Maybe from now on, we should look to a future where everyone builds their own OS. Or maybe we should all work on a future where tech that’s co-created/used by people from different parts of the world cannot be limited except by an understanding by a majority of everyone involved.

One Comment

  1. That’s sad and bad of the US administration. Are they afraid that their blue chip companies area being toppled from their top perches? Trade war deepening…
    I hope the Biden administration will go slow on these bans, and seek their renegotiations for the greater good of the global tech space.

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