U.S. Removes Xiaomi From the Entity List

Posted on May 12, 2021 by Paul Thurrott in Android, Mobile with 7 Comments

The United States has agreed to remove Chinese electronics giant Xiaomi from the Entity List, which had banned it from trading with U.S.-based technology companies.

“The parties have agreed upon a path forward that would resolve this litigation without the need for contested briefing,” a Xiaomi legal filing says, noting that the U.S. Department of Defense now agrees that vacating Xiaomi’s position on the list “would be appropriate.” The two will file a joint proposal to delist the firm later this month.

Xiaomi was placed on the Entity List in the waning days of the previous presidential administration, which had been waging a unilateral war against Chinese-based technology companies in a bid to prop up U.S.-based businesses. The most infamous example, of course, is Huawei, which was put on the Entity List in May 2019 and has met even more stringent blocks on its ability to conduct business since.

Xiaomi immediately sued, arguing correctly that the DoD had justified the change because Xiaomi was a Chinese military firm, which, of course, it is not. Xiaomi is a consumer electronics firm only and, unlike Huawei, it doesn’t participate in the networking market. And in March, a U.S. court agreed with the firm and placed a temporary hold on the ban.

“[Xiaomi] has been in compliance with law and operating in compliance with the relevant laws and regulations of jurisdictions where it conducts its businesses,” a Xiaomi statement at the time explained. “The Company reiterates that it provides products and services for civilian and commercial use. The Company confirms that it is not owned, controlled, or affiliated with the Chinese military, and is not a ‘Communist Chinese Military Company’ defined under the NDAA. The Company will take appropriate course of actions to protect the interests of the Company and its shareholders.”

It’s reasonable to wonder whether this concession will lead to a change in Huawei’s status. But the Biden administration has extended a ban on the use of China-based networking equipment. And the U.S. Congress will likely introduce bipartisan legislation aimed at helping U.S. technology companies compete better against Chinese firms.

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Comments (7)

7 responses to “U.S. Removes Xiaomi From the Entity List”

  1. Usman

    Hopefully, Huwaei phones are removed from there. Seriously those phones are of great quality, just too bad about the lack of Google Play services

    • Paul Thurrott

      Yeah, I wish there was a way to differentiate Huawei's consumer business from its networking business. Just force them to buy communications chipsets from U.S. firms. (Which they already do, of course.)

  2. JH_Radio

    Why tell a firm from another country that they can't operate here? Its all a global market anyway isn't it? the processor is a US-based company for most of these phones, so who cares? That be like somebody saying "I want to buy Ford because its an american car." Um no not really. If you took all of the parts that made said car and only used US based parts you wouldn't have a car, because cars are made globally from US and other suppliers from other country's.

    • Paul Thurrott

      Well, for national security reasons, for starters. The debate here isn't whether the U.S. is "right" to ban a Chinese firm from doing business with American firms, but rather if it's deserved. In Xiaomi's case, it very much is not. Huawei is a bit more nuanced, for sure. But banning Huawei's consumer products makes no sense to me. We can debate the merits of banning its 5G networking equipment.
  3. bluvg

    Geopolitical near-enemies with trust issues yet are major trading partners... this is a complex, multi-faceted issue unlikely to be resolved soon as China and Chinese companies become more and more competitive. Their relatively young population, the extremely high value placed on education societally and structurally, and the different approach to IP put the US in a tough spot. There are many difficult problems, but denying the inevitable slip to #2 is not going to be an effective way for the US to deal with this.

    • bluvg

      I'm trying to post it in a diplomatic way partly to prevent it from being deleted. I agree that there are often assumptions being made here around comment deletion, but being aggressive about it isn't going to help, and your own making assumptions about me (gadget lust? Ha!) greatly undermines your own protestations to Paul. I feel the assumptions were wrong so in my case, though maybe fair in some others... it's Paul's site, though, and he can do what he wants, of course. This site isn't constitutionally obligated to protect Free Speech.

      My points there are standalone comments, not a sequential progression. America slipping to #2 (not necessarily to China, though that's likely) IS inevitable (unless the world ends first)--just as it has been with every other empire and dominant civilization in history.

    • bluvg

      "And it's gone!" ?