Banned Chinese firms look to US courts after Xiaomi win: Report

Chinese companies affected by a sweeping investment ban imposed by former US President Donald Trump are reportedly considering suing the US government after a federal judge suspended a similar blacklisting for Beijing-based smartphone maker Xiaomi.

Lawyers familiar with the matter told the Reuters news agency that some of the banned Chinese companies are in talks with law firms, including Steptoe & Johnson and Hogan Lovells, emboldened by US District Judge Rudolph Contreras’ preliminary order on Friday halting Xiaomi’s inclusion on a US list of alleged Communist Chinese military companies that are subject to an investment ban.

The Trump administration’s move to blacklist Xiaomi Corp, which knocked $10bn off its market value and sent its shares down 9.5 percent in January, would have forced investors to completely divest their stakes in the company.

“Companies are reaching out to lawyers to challenge the listings and the grounds for the listings,” said Wendy Wysong, managing partner of the Hong Kong office of Steptoe & Johnson, a worldwide law firm headquartered in Washington, DC. Wysong and a person familiar with Hogan Lovells, another global law firm, declined to name the companies involved in discussions.

Contreras flagged the US government’s “deeply flawed” process for including the company in the investment ban, based on two key criteria: its development of 5G mobile network technology and artificial intelligence.

The Department of Defense alleges these technologies are “essential to modern military operations”.

The judge noted that 5G and AI technologies were fast becoming standard in consumer electronics.

“The facts that led to Xiaomi’s designation are almost laughable, and I think it absolutely is going to lead to additional companies seeking relief,” said Washington lawyer Brian Egan, a former legal adviser in both the White House and Department of State who also works at Steptoe…..read more

 

Source: Al Jazeera

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