US Senator Wants Biden Administration To Blacklist HONOR

US republican senators led by Marco Rubio have called upon the Biden administration to ban Chinese smartphone maker HONOR, a company that was formerly owned by US-blacklisted Chinese tech giant Huawei. Rubio described the now-independent tech brand as a potential threat to national security.

In a letter dated Thursday, Rubio claims that HONOR is essentially an arm of the Chinese government that has unfettered access to prized US technology currently being denied to Huawei. “Beijing has effectively dodged a critical American export control,” he wrote in the letter.

Huawei was included in the Trump administration’s sanctions in 2019 which prevented US companies from doing business with blacklisted firms, most of which are China-based as the executive order came at a time of high tensions between Washington and Beijing. Amid a global chip shortage, the Biden administration expanded the list and is expected to add even more companies.

The ban resulted in in Huawei not being able to include Android and Google Mobile Services (GMS) in their newer phones moving forward. To prevent the HONOR brand from dying off, Huawei sold its former subsidiary to a Chinese consortium, effectively going around the sanction.

HONOR and the Department of Commerce did not give a response regarding the letter. Meanwhile, Huawei only reminded Reuters of its previous statement that said it would not hold any shares or be involved in managing its former subsidiary company.

On a different note, HONOR is set to launch the HONOR 50 in Malaysia next week, its first smartphone since separating from Huawei that has GMS enabled. The company’s other post-Huawei phones, such as the V40, are expected to eventually have a global release with GMS support.

Xiaomi Gets Out Of US Blacklist Following Lawsuit

Earlier in the year, Chinese tech giant Xiaomi sued the US government, asking to be taken of the blacklist by the previous administration. It looks like that has finally happened, as an agreement has been reached between the two.

Bloomberg reports that while the main point of contention has been addressed, no details like conditions for removal were disclosed by the filing. Both parties will file a separate joint proposal by 20 May after negotiating specific terms.

Being on the blacklist meant that US investors were banned from investing in the company. Beyond that, investors will also have to divest all their holdings. Xiaomi was first put there due to suspicions of it having links to the Chinese military.

This marks one of the few times a Chinese company escapes the Trump administration’s crosshairs relatively unscathed. Video platform TikTok got out back in September, but at the cost of owner ByteDance having decreasing control over it.

Huawei, the first and hardest hit, has been slapped with another set of restrictions in March. And it’s worth noting that the new restrictions are being put in place by the new Biden administration. So it looks like Xiaomi is not exactly a barometer for relations between the US and Chinese companies.

Xiaomi Sues US Government, Demands To Be Removed From Trump-Era Blacklist

 

Xiaomi is suing the US government, demanding to be removed from a Trump-era investment blacklist. In its court filing, the company again strenuously denied having any links to the Chinese military, arguing that its inclusion on the list was thereby incorrect and illegal.

“More than 75% of the voting rights in the company under a weighted voting rights structure are held by co-founders Lei Jun and Bin Lin. Xiaomi is not owned or controlled by or otherwise affiliated with the Chinese government or military, nor is it owned or controlled by any entity affiliated with the Chinese defence industrial base,” read its legal complaint.

Xiaomi also noted that three of its top ten holders of ordinary shares were US institutional investors, namely BlackRock, Inc., The Vanguard Group, Inc., and the State Street Corporation – this in addition to having many US individuals as shareholders.

The smartphone maker argued that its inclusion on the blacklist violated the US Constitution’s key guarantees of due process as well as property and liberty rights. When it was placed on the list, Xiaomi said it got no advanced notice from the Trump administration and was given no opportunity to respond.

Xiaomi has been on that blacklist since 14 January this year. Companies on the list were designated by the Trump administration as having links to China’s military establishment and security apparatus. Not only are US investors banned from investing in companies on the list, but they must also divest all their holdings in those companies by November 2021.